Third-party providers form an intricate but crucial network that supports small-medium business (SMB) functions. They deliver quality shipping, supplies, equipment maintenance, cloud-based software services, bookkeeping, etc., at cheaper rates than achievable in-house. But since not all vendors, suppliers, or partners are right for your business, it is always critical to perform due diligence to identify the right ones for you. Performing this allows you to make data-driven decisions about who you do business with and in what capacity. It is also an important function to help you understand your business’s potential liability under anti-corruption laws and other legislation.
Due diligence allows you to undertake various transactions from an informed standpoint. It identifies opportunities and red flags within the partnership that you didn’t know existed. Here’s how to conduct third-party due diligence:
Other than third-party vendors and supplies, this also allows you to analyze your company’s liabilities. Here are some areas that you can run for your small business:
The problem is that conducting due diligence is not always as straightforward as you’d like it to be, especially for small businesses. There are endless regulations guarding the process, massive amounts of siloed and hard-to-reach data, and complex processes to deal with. Not to mention the common issues like lack of expertise, slowness of execution, not knowing what questions to ask, and cost challenges. All these can be overwhelming, to say the least.
Luckily, you don’t have to base your due diligence on a mix of Word Documents, PDFs, emails, or Excel spreadsheets. You can take advantage of software that’s designed to streamline the entire process. The best ones, like Enformion, facilitate the sharing of checklists, questionnaires, etc. They let you track and control everything in one place. With third-party management software, you can:
Performing due diligence on a dispersed, multi-layer partner/vendor network is a daunting task, yet a critical one. But with the help of this software, you can screen, assess risk, monitor and take actions against fraudster vendors to protect your business. Contact us today to learn more about our due diligence software.