Best Practices for Vendor Relationships
Every successful small business needs a supply chain and relies heavily on having the right vendors and the right relationships with those vendors. So how do you stay on good terms with the businesses that keep you in business?
By creating and maintaining open lines of communication, sharing customers' expectations and future goals, and, most of all, avoiding a few common legal pitfalls. Here are some best practices for keep your vendor relationships health, productive, and legal.
Write It Right
We've said it a million times before; you've heard it a million times before; but have you put it into practice? Get. It. In. Writing. Agreements with vendors require a written contract that sets the expectations of both parties, how and when those expectations will be met, and what happens if they are not. Even phone and in-person conversations should get an email follow-up, memorializing the discussion so everyone is on the same page.
Tackle the Tech
You've seen too many businesses get hacked to play games with your cybersecurity. But are your vendors playing ball with you? Because small businesses are becoming more integrated with their vendors, more and more are demanding proof from vendors that their cybersecurity will keep customers' data safe and secure. Any vendor who has access to sensitive customer or business information should have the same cybersecurity interests as your business.
Be careful how you pay your vendors -- the Better Business Bureau recently warned small business owners about a scam targeting vendor payment systems. And the fastest way to sour a vendor relationship is a payment dispute. Make sure all vendor payments are approved by more than one member of your staff and be wary of any wire transfers. Generally speaking, a check mailed to the proper address in response to a valid purchase order will suffice.
Vendor relationships can be tricky and vendor contracts even more so. If you'd like help crafting or reviewing your vendor contracts, you can consult with an experienced contracts attorney near you.
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