Running a business involves forming corporate relationships with numerous different entities. Many companies rely on vendors, who can supply the required components to ensure customer transactions run smoothly.
Working with an external party involves a level of trust and good communication. Outlined below are some best practices to keep in mind when contracting with vendors.
1. Be clear about your orders
As stated, successful business relationships with vendors are founded on good communication. Your orders should clarify the exact product or service you require as well as the completion date.
With vendors you trust, it can be tempting to make informal arrangements. The risk of this is never worth it. Every order should be backed up by a vendor contract which protects the rights of both parties.
2. Monitor vendor performance
Your early experiences with vendors may go well, but it’s important to continually monitor their performance. Your requirements may change and the vendor must be able to meet your demands.
A quarterly vendor performance review can help ensure that you are receiving goods and services on time consistently. This type of due diligence means that you can retain good relations with your own customers.
3. Review your contracts
A watertight vendor contract means that you are protected. In the event that your vendor does not deliver, you can pursue damages based on breach of contract. It’s also important to review your contracts annually to make sure that they continue to meet your needs and adhere to all current legal standards.
The best way to ensure that your vendor contracts are sound is to have legal guidance on your side. We help businesses manage relationships with vendors; feel free to contact us for a consultation.