Strong Supplier Relationship Means Strong Profitability

Strong Supplier Relationship Means Strong Profitability

There is a lot written about creating a good relationship with your customers. By establishing a relationship, you build trust. That trust and knowledge of your customer allows you to serve them better, get your orders right on the first try and often creates regular repeat business. This type of bread-and butter-business gives your company stability and keeps you profitable. The same can be said on the other side of the equation, your relationship with your vendors. In this case, you are the customer; however a strong relationship with your suppliers will give your partnership a solid footing. If your vendor can anticipate your needs, they will have stock ready to go when you need it, and they will work harder for you in special circumstances. A strong supplier relationship means that your profits will stay strong because your vendor will work with you instead of against you. How can you build a strong relationship with your supplier? Like any relationship, a supplier relationship is built on trust. Trust has to be earned over time. Of course, the relationship is a two-way street. You need to trust your supplier too. However, there are ways that you can build your relationship actively and build the trust at the same time. Keep Your Supplier Informed If you know of orders coming down the pike, inform your supplier with plenty of lead time to have your orders filled on time. If changes come along in the mean time, you can continue to stay in touch with your supplier on a regular basis to make them feel part of the loop. If they...
10 Vendor Validations that Protect Your Company

10 Vendor Validations that Protect Your Company

Click here to share this Supplier Validation Success Brief with a colleague. When adding new suppliers to your vendor list, it is important to ensure that they are legitimate businesses to protect your company from fraud. It’s unfortunate, but a fact of business, that diligence in this matter can save your company major hassles later on. Beside the need to protect your company from fraud, you also want to make sure that your end customers get high-quality products or services from your suppliers to maintain the reputation of your brand. In order to significantly lower the chance of working with a fraudulent vendor, there are ten vendor validations you can do before you start working together and during the period of your contract. 1. Research the vendor online You can start by doing some research of the new vendor online to see if they are legitimate. Look for a website, social media pages and customer reviews to see if they have a presence. While this can still be a fraudulent company, it is still a good place to start. You can check their listed contact information and see if all of the online pages are consistent with each other. 2. Check their physical address Checking a physical address is an important step to establishing the legitimacy of a company. If they are a manufacturer, then they need to have a plant to manufacture in. While their sales people may travel to meet with you, they require a physical location to conduct business. If necessary, you can travel to meet them at their location before you start doing business. 3. Verify their...
How Much Money Are You Losing To Paper Checks?

How Much Money Are You Losing To Paper Checks?

Are you still using paper checks to pay your vendors and employees? You may be wasting money and time by following this practice. Blackline has found that 78% of medium and large businesses are still using paper checks for 78% of their suppliers. However, using paper checks costs small businesses an incredible amount of money every year, in the way of maintenance and repair, cost of the paper checks and other labor and supplies to run them. If you are one of these companies, you should look into your costs for using paper checks and see if you can improve your profit margin by making a change. Are You Losing Money? Accepting checks from your customers means that you wait longer for money to deposit in your bank account. It is also true that the average invoice cycle when checks are used to pay bills is almost 18 days. If you mail out an invoice to your customer and they mail back a check for payment, you run the risk of those mailings getting lost in the mail. Even if the postal service processes and delivers everything efficiently, you still need to wait to receive the check, deposit it and wait for the check to clear. Many accounting departments make their bank deposit physically by taking it to the bank. If this is your practice, you are also spending money on the transportation to get there. As an alternative, if you bill your customers electronically by email or online, you can get paid immediately. Money gets deposited within 24 to 48 hours, and you can track it electronically without...
You’re Picking the Wrong Supplier: 3 Warning Signs

You’re Picking the Wrong Supplier: 3 Warning Signs

Suppliers are an important part of the profit-margin equation for any company.   Unfortunately, there are those suppliers that try to get more than their fair share of your profits.   Dishonest suppliers may commit fraud in several ways to pocket money that should go to your bottom line. Since staying competitive is a large factor toward staying in business, losing your competitive edge due to higher than normal costs is a grave issue.   When those costs are caused by fraud, the problem is literally criminal. Therefore, choosing a supplier to work with is a critical issue. Regular and routine security measures ensure that no suppliers have slipped through the cracks.   What are the Signals that a Supplier May be Fraudulent?   Before you hire a vendor, you should check for signals that they may be fraudulent. It is sad that there are so many people trying to make a buck from other people’s work, but the truth is that fraud is a genuine threat to your business. Compliance factors for businesses are meant to help maintain a healthy, honest relationship with your vendors, and prevent problem vendors from becoming partners with your company.   Vendors that you are considering should go through an application process that checks the following items:   Checking for overlap between the mailing address of a vendor and their employees Checking vendors with P.O. Box mailing addresses for legitimacy Verifying vendors’ tax I.D.’s and phone numbers as legitimate Ensuring that the business is registered with the state and that all of the forms are in order Having third-party verification of the vendor...