You started your business because you’re an expert in your field, not a financial or technical expert. When you get help from vendors, you are depending on them to deliver so you can focus on your business. So how do you know if vendors are delivering?
Here are three simple steps to make sure that vendors deliver for you:
1. Understand What to Expect
Talk in detail about the vendor’s process, prices, deliverables, and other aspects of working together with you. Make sure to address the inputs and feedback needed from you to complete the work. Avoid misunderstandings by documenting all performance expectations and other requirements in an agreement. Agreements should include how the vendor will address deadlines, quality, and other essential success factors for your business.
2. Get Status Updates and Detailed Invoices
Vendors should provide periodic work status updates or statements. This allows you to track their progress against the budget, the project plan or other management tool. Vendor invoices should include enough details to show what was being billed, the price, and other terms. Verify that purchased goods and services were received as expected before paying the invoice.
3. Ask Questions and Voice Concerns
Status reports don’t replace knowing your vendors and communicating with them. If something changes or doesn’t seem “right”, ask what’s going on and why. Follow-up if the answer doesn’t make sense or you don’t understand. Ignoring red flags could cost you money and your reputation. Hold vendors accountable to clearly answer your questions.
It can be expensive and damaging to your business to find out that a vendor you depended on did not deliver. Outsourcing can be great but it comes with risks. Businesses can avoid expensive surprises by investing time and attention in the three simple steps above.