Third-party vendors are an invaluable part of every business. Whether you’re buying from suppliers, commissioning services from freelancers, or hiring someone for maintenance, it is important to build relationships with quality, reliable vendors.
How do you find the right vendor for your business? With a thorough screening process. Today, let’s discuss the best way to screen any potential vendors.
Tips for Screening Vendors
Before you start onboarding any vendors for your business, you should put them through a screening process to ensure they’re a good fit for you. This will help you weed out unreliable or untrustworthy vendors (like the HVAC vendors who hacked into Target’s cyber systems and stole customer data), and it will ensure that both you and your vendor understand the requirements of your relationship.
Here are a few helpful tips for screening your vendors.
Create an evaluation process
The first part of any vendor screening process is brainstorming and evaluation. Sit down and determine the parameters and expectations you have for a vendor. What automatically disqualifies a vendor from working with you? What are you looking for from your vendors (client reviews, years in business, etc.)?
Once you’ve set your parameters, you might also consider the steps in your screening process. Will you ask vendors for references from previous clients? Will you review their company policies on things like security, code of conduct, or training? Take time to determine which steps will make you feel most comfortable with your vendor relationship.
Have clear requirements in place
After you’ve evaluated your requirements for a vendor, you need to make sure those requirements are clear. Maybe you’ll want them to sign a code of conduct to work with your organization. Perhaps you expect them to complete a task in a certain amount of time. Whatever you’re looking for, put all your vendor requirements in writing, from the initial evaluation to the expectations for the job.
These clear-cut requirements will help you eliminate vendors who don’t make the grade, which helps narrow down your search for the right vendor. Additionally, written expectations can remove much of the potential for confusion, which makes your relationship with the vendor much more pleasant.
Create a process for collecting data
When you begin the search for a vendor, it’s wise to set up a vendor portal. This will allow suppliers, freelancers, or any other third-party workers to give you their information without getting lost in the shuffle.
Ideally, a vendor portal will collect data (which the vendor typically provides through a form) and organize it for you to review. This will help you quickly evaluate an organization based on the parameters you set, which allows you to find possible vendors more quickly.
Have a plan for communicating with vendors
Let’s say that you’ve completed the screening process and you’ve found the right vendor. You both sign a contract and you’re ready to start working together… now what? If you want your new relationship to be a smooth one, it’s important to establish a clear and simple communication plan.
Assign a point of contact within your company for your new vendor. This can help eliminate miscommunication and ensure that your vendor is getting the most accurate information from your business. It’s also wise to follow up with your vendors shortly after onboarding to make sure they have a complete understanding of the requirements and expectations on both sides.
Have a plan for data security
Working with a third party can sometimes be a security risk – and the fact is that a security problem with your vendor means a security problem for your company. Therefore, it is very important to develop a robust data security plan for your organization.
Use security measures to ensure vendors only have access to the data they need. Include data and security privacy policies in your vendor code of conduct. If your vendor is using their own cloud storage or cyber security, ask for an audit to confirm it’s properly protected. These extra steps can be the difference between protected data or an infamous “hack.”
If you use our advice, screening, and onboarding your third-party vendors will be a painless process. With proper screening, you can find high-quality vendors, build excellent relationships, and help both your business and theirs grow and thrive.
Of course, the best way to screen your vendors is with effective screening software. Visit ComplianceLine today to learn how our screening services can help you discover hidden threats among your potential vendors and keep your business ethical and compliant.