Contractor Management

7 Ways to Keep Supplier Problems from Becoming Yours

Avetta Marketing
min read

It’s vital to assess the financial health of any supplier or contractor you hire to ensure their financial issues don’t become your own. In fact, one report found that supplier financial risk represented nearly 48% of all business risk events in 2020.

Many companies run a credit check on suppliers but may not do much beyond that. But unfortunately, there is a lot of critical information missed in a one-time credit check that could spell big trouble for your bottom line.

Here are seven reasons why it’s essential to conduct global, real-time, continuous business and financial monitoring for your entire supply chain—plus how to do it successfully.

1. Increase Business Confidence

If even one critical supplier fails to deliver on their contract, it can lead to a costly supply chain disruption. In the same report highlighted above, 60% of organizations said that these disruptions caused their financial performance to drop by at least 3%.  

To minimize financial risk, companies should take proactive measures before work begins. By assessing the economic stability of any partner you hire (and continually monitoring for any changes to their financial health), you can ensure you’re bringing fiscally responsible, stable resources into your project and ultimately, your organization.  

2. Unreliable Payments

When suppliers get behind on their payments, they could be putting the work they do for you at risk. Their creditors could repossess assets that you paid for or file judgments against your joint assets. Unstable suppliers can’t make good on their promises due to a range of financial issues, such as:

  • Bankruptcy
  • History of late payments
  • Legal proceedings

While a credit check can shed some light on their stability, these are limited in scope. Traditional credit scoring is country-specific, meaning scores don’t detect international financial scores. It would help if you had more than a one-time analysis, as financial indicators can change regularly, opening up your company to constantly evolving risks.

3. Mitigate Skills/Expertise Risk

One supplier might have the exact expertise that you need. However, what would happen if you discovered that they couldn’t meet their contractual agreements due to financial instability?  

If you’re putting all your business eggs in one proverbial basket, you could find yourself empty-handed if a crisis occurs.  

A financial risk analysis can help you determine where to diversify your supplier base. This way, you can source your specialized goods or services from several different places, which improves your operational agility and responsiveness.

4. Avoid Legal Issues

When a supplier fails to keep up their side of a deal, the resulting aftermath isn’t just messy and uncomfortable. It can also turn litigious.  

Even if you aren’t directly involved in a supplier’s legal issue, it can stain your business through association. And consider the risk of one of your suppliers losing a big lawsuit or being hit with a significant penalty. Those financial consequences could make their way back to you in the form of delayed payments, supply chain disruptions, or breach of contract.  

5. Reduce Delays and Save Time

To maintain a steady flow of goods and services, you need suppliers that are trustworthy and capable of meeting demand. Even one weak link can disrupt core business processes, creating a domino effect throughout your entire supply chain.  

Once you’ve verified that your suppliers are financially stable and low-risk, you can rest assured that any additional costs or delays you incur should be minimal. When you’re forced to scramble to replace a critical but unreliable supplier, it reroutes your plans and makes managing projects downstream difficult.  

6. Improve Customer Service

When you complete your project deliverables on time, your company isn’t the only one that benefits. This commitment to quality also delights your customers, who have grown increasingly used to rapid-pace delivery times and premium goods.  

Taking time away from your day-to-day workflows to replace high-risk suppliers adds time and expense to your solution. If you can eliminate this step, you can operate on a leaner business model that makes your current clients happy and attracts the attention of new and repeat business.

7. Avoid Reputational Risk

According to one study, businesses with a bad reputation will pay around 10% more for each new hire. So is your reputation saving or costing you money?

If you hire an unstable supplier that becomes embroiled in a financial dispute, then you’ll feel the brunt of the impact. Not only are there fines and penalties associated with these actions, but there’s also the risk of reputational loss any time the following is mentioned alongside your name:

  • Sanctions
  • Negative media reports  
  • Criminal investigations  
  • Lawsuits and legal proceedings  

Even if you’ve taken pains to keep your own books clean, those efforts won’t matter when the headlines splash across the news. To keep your reputation and image intact, double-check each supplier’s financial risk factors before adding their name next to yours.

How to Effectively Assess the Financial and Business Risk of Each Supplier

Global supply chain leaders should monitor financial and business risks on an ongoing basis. An essential part of that process is checking the credentials, background, skills, and financial security of any supplier you bring on board.

Instead of isolating these different factors and reviewing them separately, you can invest in a comprehensive solution that gathers and analyzes this critical data for you. From poor payment history and liens to bankruptcies, media reports, and fluctuating credit scores, these platforms help you find and act on critical risks early on in your supplier relationship.

Our new Business Risk feature gives you a global, real-time view into every aspect of your suppliers’ business health and financial health, including continuous monitoring, so you always have the most up-to-date information. Learn more about how this feature works and the benefits it can provide.

,
Financial Risk
Risk Management
Sustainability
Contractor Management
7 Ways to Keep Supplier Problems from Becoming Yours

Avetta Marketing
min read

It’s vital to assess the financial health of any supplier or contractor you hire to ensure their financial issues don’t become your own. In fact, one report found that supplier financial risk represented nearly 48% of all business risk events in 2020.

Many companies run a credit check on suppliers but may not do much beyond that. But unfortunately, there is a lot of critical information missed in a one-time credit check that could spell big trouble for your bottom line.

Here are seven reasons why it’s essential to conduct global, real-time, continuous business and financial monitoring for your entire supply chain—plus how to do it successfully.

1. Increase Business Confidence

If even one critical supplier fails to deliver on their contract, it can lead to a costly supply chain disruption. In the same report highlighted above, 60% of organizations said that these disruptions caused their financial performance to drop by at least 3%.  

To minimize financial risk, companies should take proactive measures before work begins. By assessing the economic stability of any partner you hire (and continually monitoring for any changes to their financial health), you can ensure you’re bringing fiscally responsible, stable resources into your project and ultimately, your organization.  

2. Unreliable Payments

When suppliers get behind on their payments, they could be putting the work they do for you at risk. Their creditors could repossess assets that you paid for or file judgments against your joint assets. Unstable suppliers can’t make good on their promises due to a range of financial issues, such as:

  • Bankruptcy
  • History of late payments
  • Legal proceedings

While a credit check can shed some light on their stability, these are limited in scope. Traditional credit scoring is country-specific, meaning scores don’t detect international financial scores. It would help if you had more than a one-time analysis, as financial indicators can change regularly, opening up your company to constantly evolving risks.

3. Mitigate Skills/Expertise Risk

One supplier might have the exact expertise that you need. However, what would happen if you discovered that they couldn’t meet their contractual agreements due to financial instability?  

If you’re putting all your business eggs in one proverbial basket, you could find yourself empty-handed if a crisis occurs.  

A financial risk analysis can help you determine where to diversify your supplier base. This way, you can source your specialized goods or services from several different places, which improves your operational agility and responsiveness.

4. Avoid Legal Issues

When a supplier fails to keep up their side of a deal, the resulting aftermath isn’t just messy and uncomfortable. It can also turn litigious.  

Even if you aren’t directly involved in a supplier’s legal issue, it can stain your business through association. And consider the risk of one of your suppliers losing a big lawsuit or being hit with a significant penalty. Those financial consequences could make their way back to you in the form of delayed payments, supply chain disruptions, or breach of contract.  

5. Reduce Delays and Save Time

To maintain a steady flow of goods and services, you need suppliers that are trustworthy and capable of meeting demand. Even one weak link can disrupt core business processes, creating a domino effect throughout your entire supply chain.  

Once you’ve verified that your suppliers are financially stable and low-risk, you can rest assured that any additional costs or delays you incur should be minimal. When you’re forced to scramble to replace a critical but unreliable supplier, it reroutes your plans and makes managing projects downstream difficult.  

6. Improve Customer Service

When you complete your project deliverables on time, your company isn’t the only one that benefits. This commitment to quality also delights your customers, who have grown increasingly used to rapid-pace delivery times and premium goods.  

Taking time away from your day-to-day workflows to replace high-risk suppliers adds time and expense to your solution. If you can eliminate this step, you can operate on a leaner business model that makes your current clients happy and attracts the attention of new and repeat business.

7. Avoid Reputational Risk

According to one study, businesses with a bad reputation will pay around 10% more for each new hire. So is your reputation saving or costing you money?

If you hire an unstable supplier that becomes embroiled in a financial dispute, then you’ll feel the brunt of the impact. Not only are there fines and penalties associated with these actions, but there’s also the risk of reputational loss any time the following is mentioned alongside your name:

  • Sanctions
  • Negative media reports  
  • Criminal investigations  
  • Lawsuits and legal proceedings  

Even if you’ve taken pains to keep your own books clean, those efforts won’t matter when the headlines splash across the news. To keep your reputation and image intact, double-check each supplier’s financial risk factors before adding their name next to yours.

How to Effectively Assess the Financial and Business Risk of Each Supplier

Global supply chain leaders should monitor financial and business risks on an ongoing basis. An essential part of that process is checking the credentials, background, skills, and financial security of any supplier you bring on board.

Instead of isolating these different factors and reviewing them separately, you can invest in a comprehensive solution that gathers and analyzes this critical data for you. From poor payment history and liens to bankruptcies, media reports, and fluctuating credit scores, these platforms help you find and act on critical risks early on in your supplier relationship.

Our new Business Risk feature gives you a global, real-time view into every aspect of your suppliers’ business health and financial health, including continuous monitoring, so you always have the most up-to-date information. Learn more about how this feature works and the benefits it can provide.

,
Financial Risk
Risk Management
Sustainability
Contractor Management
7 Ways to Keep Supplier Problems from Becoming Yours

Access this on-demand, anytime anywhere
Avetta Marketing
min read
Contractor Management
7 Ways to Keep Supplier Problems from Becoming Yours

Avetta Marketing
min read

It’s vital to assess the financial health of any supplier or contractor you hire to ensure their financial issues don’t become your own. In fact, one report found that supplier financial risk represented nearly 48% of all business risk events in 2020.

Many companies run a credit check on suppliers but may not do much beyond that. But unfortunately, there is a lot of critical information missed in a one-time credit check that could spell big trouble for your bottom line.

Here are seven reasons why it’s essential to conduct global, real-time, continuous business and financial monitoring for your entire supply chain—plus how to do it successfully.

1. Increase Business Confidence

If even one critical supplier fails to deliver on their contract, it can lead to a costly supply chain disruption. In the same report highlighted above, 60% of organizations said that these disruptions caused their financial performance to drop by at least 3%.  

To minimize financial risk, companies should take proactive measures before work begins. By assessing the economic stability of any partner you hire (and continually monitoring for any changes to their financial health), you can ensure you’re bringing fiscally responsible, stable resources into your project and ultimately, your organization.  

2. Unreliable Payments

When suppliers get behind on their payments, they could be putting the work they do for you at risk. Their creditors could repossess assets that you paid for or file judgments against your joint assets. Unstable suppliers can’t make good on their promises due to a range of financial issues, such as:

  • Bankruptcy
  • History of late payments
  • Legal proceedings

While a credit check can shed some light on their stability, these are limited in scope. Traditional credit scoring is country-specific, meaning scores don’t detect international financial scores. It would help if you had more than a one-time analysis, as financial indicators can change regularly, opening up your company to constantly evolving risks.

3. Mitigate Skills/Expertise Risk

One supplier might have the exact expertise that you need. However, what would happen if you discovered that they couldn’t meet their contractual agreements due to financial instability?  

If you’re putting all your business eggs in one proverbial basket, you could find yourself empty-handed if a crisis occurs.  

A financial risk analysis can help you determine where to diversify your supplier base. This way, you can source your specialized goods or services from several different places, which improves your operational agility and responsiveness.

4. Avoid Legal Issues

When a supplier fails to keep up their side of a deal, the resulting aftermath isn’t just messy and uncomfortable. It can also turn litigious.  

Even if you aren’t directly involved in a supplier’s legal issue, it can stain your business through association. And consider the risk of one of your suppliers losing a big lawsuit or being hit with a significant penalty. Those financial consequences could make their way back to you in the form of delayed payments, supply chain disruptions, or breach of contract.  

5. Reduce Delays and Save Time

To maintain a steady flow of goods and services, you need suppliers that are trustworthy and capable of meeting demand. Even one weak link can disrupt core business processes, creating a domino effect throughout your entire supply chain.  

Once you’ve verified that your suppliers are financially stable and low-risk, you can rest assured that any additional costs or delays you incur should be minimal. When you’re forced to scramble to replace a critical but unreliable supplier, it reroutes your plans and makes managing projects downstream difficult.  

6. Improve Customer Service

When you complete your project deliverables on time, your company isn’t the only one that benefits. This commitment to quality also delights your customers, who have grown increasingly used to rapid-pace delivery times and premium goods.  

Taking time away from your day-to-day workflows to replace high-risk suppliers adds time and expense to your solution. If you can eliminate this step, you can operate on a leaner business model that makes your current clients happy and attracts the attention of new and repeat business.

7. Avoid Reputational Risk

According to one study, businesses with a bad reputation will pay around 10% more for each new hire. So is your reputation saving or costing you money?

If you hire an unstable supplier that becomes embroiled in a financial dispute, then you’ll feel the brunt of the impact. Not only are there fines and penalties associated with these actions, but there’s also the risk of reputational loss any time the following is mentioned alongside your name:

  • Sanctions
  • Negative media reports  
  • Criminal investigations  
  • Lawsuits and legal proceedings  

Even if you’ve taken pains to keep your own books clean, those efforts won’t matter when the headlines splash across the news. To keep your reputation and image intact, double-check each supplier’s financial risk factors before adding their name next to yours.

How to Effectively Assess the Financial and Business Risk of Each Supplier

Global supply chain leaders should monitor financial and business risks on an ongoing basis. An essential part of that process is checking the credentials, background, skills, and financial security of any supplier you bring on board.

Instead of isolating these different factors and reviewing them separately, you can invest in a comprehensive solution that gathers and analyzes this critical data for you. From poor payment history and liens to bankruptcies, media reports, and fluctuating credit scores, these platforms help you find and act on critical risks early on in your supplier relationship.

Our new Business Risk feature gives you a global, real-time view into every aspect of your suppliers’ business health and financial health, including continuous monitoring, so you always have the most up-to-date information. Learn more about how this feature works and the benefits it can provide.

,
Financial Risk
Risk Management
Sustainability
Contractor Management
7 Ways to Keep Supplier Problems from Becoming Yours

Download this resource now
Avetta Marketing
min read
Contractor Management
7 Ways to Keep Supplier Problems from Becoming Yours

Avetta Marketing
min read

It’s vital to assess the financial health of any supplier or contractor you hire to ensure their financial issues don’t become your own. In fact, one report found that supplier financial risk represented nearly 48% of all business risk events in 2020.

Many companies run a credit check on suppliers but may not do much beyond that. But unfortunately, there is a lot of critical information missed in a one-time credit check that could spell big trouble for your bottom line.

Here are seven reasons why it’s essential to conduct global, real-time, continuous business and financial monitoring for your entire supply chain—plus how to do it successfully.

1. Increase Business Confidence

If even one critical supplier fails to deliver on their contract, it can lead to a costly supply chain disruption. In the same report highlighted above, 60% of organizations said that these disruptions caused their financial performance to drop by at least 3%.  

To minimize financial risk, companies should take proactive measures before work begins. By assessing the economic stability of any partner you hire (and continually monitoring for any changes to their financial health), you can ensure you’re bringing fiscally responsible, stable resources into your project and ultimately, your organization.  

2. Unreliable Payments

When suppliers get behind on their payments, they could be putting the work they do for you at risk. Their creditors could repossess assets that you paid for or file judgments against your joint assets. Unstable suppliers can’t make good on their promises due to a range of financial issues, such as:

  • Bankruptcy
  • History of late payments
  • Legal proceedings

While a credit check can shed some light on their stability, these are limited in scope. Traditional credit scoring is country-specific, meaning scores don’t detect international financial scores. It would help if you had more than a one-time analysis, as financial indicators can change regularly, opening up your company to constantly evolving risks.

3. Mitigate Skills/Expertise Risk

One supplier might have the exact expertise that you need. However, what would happen if you discovered that they couldn’t meet their contractual agreements due to financial instability?  

If you’re putting all your business eggs in one proverbial basket, you could find yourself empty-handed if a crisis occurs.  

A financial risk analysis can help you determine where to diversify your supplier base. This way, you can source your specialized goods or services from several different places, which improves your operational agility and responsiveness.

4. Avoid Legal Issues

When a supplier fails to keep up their side of a deal, the resulting aftermath isn’t just messy and uncomfortable. It can also turn litigious.  

Even if you aren’t directly involved in a supplier’s legal issue, it can stain your business through association. And consider the risk of one of your suppliers losing a big lawsuit or being hit with a significant penalty. Those financial consequences could make their way back to you in the form of delayed payments, supply chain disruptions, or breach of contract.  

5. Reduce Delays and Save Time

To maintain a steady flow of goods and services, you need suppliers that are trustworthy and capable of meeting demand. Even one weak link can disrupt core business processes, creating a domino effect throughout your entire supply chain.  

Once you’ve verified that your suppliers are financially stable and low-risk, you can rest assured that any additional costs or delays you incur should be minimal. When you’re forced to scramble to replace a critical but unreliable supplier, it reroutes your plans and makes managing projects downstream difficult.  

6. Improve Customer Service

When you complete your project deliverables on time, your company isn’t the only one that benefits. This commitment to quality also delights your customers, who have grown increasingly used to rapid-pace delivery times and premium goods.  

Taking time away from your day-to-day workflows to replace high-risk suppliers adds time and expense to your solution. If you can eliminate this step, you can operate on a leaner business model that makes your current clients happy and attracts the attention of new and repeat business.

7. Avoid Reputational Risk

According to one study, businesses with a bad reputation will pay around 10% more for each new hire. So is your reputation saving or costing you money?

If you hire an unstable supplier that becomes embroiled in a financial dispute, then you’ll feel the brunt of the impact. Not only are there fines and penalties associated with these actions, but there’s also the risk of reputational loss any time the following is mentioned alongside your name:

  • Sanctions
  • Negative media reports  
  • Criminal investigations  
  • Lawsuits and legal proceedings  

Even if you’ve taken pains to keep your own books clean, those efforts won’t matter when the headlines splash across the news. To keep your reputation and image intact, double-check each supplier’s financial risk factors before adding their name next to yours.

How to Effectively Assess the Financial and Business Risk of Each Supplier

Global supply chain leaders should monitor financial and business risks on an ongoing basis. An essential part of that process is checking the credentials, background, skills, and financial security of any supplier you bring on board.

Instead of isolating these different factors and reviewing them separately, you can invest in a comprehensive solution that gathers and analyzes this critical data for you. From poor payment history and liens to bankruptcies, media reports, and fluctuating credit scores, these platforms help you find and act on critical risks early on in your supplier relationship.

Our new Business Risk feature gives you a global, real-time view into every aspect of your suppliers’ business health and financial health, including continuous monitoring, so you always have the most up-to-date information. Learn more about how this feature works and the benefits it can provide.

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Financial Risk
Risk Management
Sustainability