Reduce risk to your business by tracking and enforcing vendor compliance.
In business, compliance is defined as the confirmation that a provider of a service, or a manufacturer or supplier of goods, adheres to all the requirements, regulations, legislation and specific standards and policies of a contract or a business relationship. In terms of day-to-day activities, compliance issues range from ensuring your vendors insurance policies are up to date, have the required coverage, and have not passed their expiration date to, in the case of taxes, your suppliers have a valid W9 (W8 if a foreign entity) and their TIN or SSN has been validated by the IRS. Or perhaps in the case of a procurement scenario, vendors who have identified as “diverse” and therefore qualify for certain contract participation, have a valid, non-expired certificate issued by an authorized agency certifying their diverse status. These are only a few examples of many areas of compliance that your vendors may be required adhere to, often driven by industry, customer, and the nature of products or services provided. An example of this would be the supplier of materials used at a nuclear power plant would have a much greater compliance burden that the office supplier vendor who provides the paper for your companies copiers and printers. The risk of non-compliance would be much greater as well!
The process of ongoing maintenance and administration to track expiring certificates, licenses, permits and contracts is necessary to ensure compliance. However these tasks can be very manual which leaves businesses prone to human error, or insufficient due diligence, resulting in a lapse in compliance. Such a lapse exposes businesses to a high level of risk and the potential costs in liability. An example of this was a retail store who had a snow removal vendor that accidentally struck a person in the parking lot of their business resulting in a fatality. In the ensuing litigation it was discovered that the snow removal vendors insurance, which should have mitigated the retailers economic risk, had expired. As a result the retailer was left with the entire financial liability. Had a better process been in place this situation could have been avoided.
The good news is, there are business tools available to help your company to increase the level of compliance in all areas of your vendor or supplier relationships while reducing the manual labor involved and eliminating the significant risk from out of compliance vendors. Implementing a solution such as ICG’s Vendor Onboarding and Maintenance solution (supplier onboarding) is a great way to ensure your vendors are in compliance with your requirements from the start. The ongoing maintenance features from this vendor portal (supplier portal) based solution includes automatically tracking and notifying vendors and internal contacts in your organization of approaching expirations for insurance, licenses, certifications or any other date sensitive areas of compliance. To add an even higher level of diligence, this solution will track the activity, or lack thereof, of the vendor toward renewing policies or other time based requirements needed to stay in compliance. If inactivity is noted as the expiration gets closer, the solution will escalate notifications within the vendor and buying company until action is taken. These highly configurable, cloud-hosted solutions provides our clients peace of mind that their vendor remain in compliance and their vendor master data is up to date, reducing any risk of liability.
Watch this high level demonstration to learn more about ICG’s Vendor Onboarding solution. You can also watch this short video for an overview of ICG’s vendor management solutions. Or contact us today for your own personalized demo!