Vendor Background Checks: Get the Info You Need Before a Relationship Starts

Relationships are essential to your organization’s operations. That holds true whether you’re a business, a non-profit or a government agency. But these relationships can’t be entered into lightly. Whether you’re making a key acquisition or engaging a new supplier, it’s important that you learn as much as you can about the new relationship. Why? Because entering a relationship with the wrong individual or entity can have grave consequences for your organization. The wrong relationship can mean damage to your brand, and it can even put your organization at risk of legal action, financial penalties or both. When you select a new vendor, you’re certainly starting a new and important relationship — one that demands careful consideration.

At CSBusinessScreen.com, we offer vendor background checks that deliver helpful and valuable information before the relationship with a new vendor begins. Here’s a look at five key questions that a comprehensive vendor background check can help answer.

Does Your Vendor Have a Criminal History?

Any vendor attempts to put its best foot forward during an RFP process or while pitching your organization on a services agreement. After all, they are trying to win your business. But putting the best foot forward often means that a vendor isn’t going to volunteer information that may raise red flags — information like a principal or executive’s criminal history.

A comprehensive vendor background check can uncover relevant criminal history. If a vendor’s principal or executive has been charged with stealing from clients or engaging in similarly illegal activity, you would want to know about it, right? A vendor background check delivers this information when it matters most — before a relationship starts.

Is Your Vendor Experiencing Legal Issues?

Just as you want to know about a vendor’s criminal history, you also want to know if the organization is involved in any lawsuits. A pending lawsuit can be a sign of trouble for two reasons. First, it provides an indication that the vendor has experienced issues with clients in the past. And, second, a lawsuit can be something that distracts the vendor from day-to-day operations — including delivering outstanding service on your organization’s behalf. A pending or ongoing lawsuit doesn’t necessarily need to be a deal-breaker. But it is an opportunity for you to learn more before selecting a vendor. Always let your vendor know (and get consent) before you conduct a background check. This lets your prospective vendors know that you take seriously the relationships you enter into, and it also offers the chance to have follow-up conversations about anything that emerges from a background check — including information on the details and validity of lawsuits.

Has Your Vendor Used Other Names?

Has your vendor used different names in the past? A DBA is a perfectly acceptable method for creating a separate business identity for marketing different products and services. But, in some cases, the use of a different name can mean that the vendor is trying to obscure something in its past.Much like lawsuits that emerge from vendor background checks, the use of other names should be a point of discussion — an opportunity for you to learn more.

Is Your Vendor Properly Licensed and Insured?

As baseline requirements, your vendors should have appropriate levels of insurance and the proper licenses required to deliver service in your state or area. A vendor background check can confirm both. And, going one step further, a comprehensive vendor background check can also provide a deep-dive into your vendor’s license history.

Has your vendor lost its licenses for any period? Has your vendor been placed on probationary status as it relates to licenses? If so, this is important information that you should secure before entering into a relationship.

Who are Your Vendor’s Employees?

When you select a vendor, their employees often become front-line staff at your facilities — think a contracted cleaning service at a hospital, a contracted security team at a large retail outlet, or dining services workers at stadiums, airports and similar venues. Do you know who your vendor’s employees are?A background check can help shed light on how a vendor chooses employees as well as any issues they’ve experienced in the past. For example, if your vendor uses anything other than legal residents, your organization could find itself at risk of legal issues, costly fines and other penalties.

Steer Clear of Risk and Liability

There’s no better time to learn about your vendors than before you enter into a services agreement. A comprehensive vendor background check is the best way to gather the information needed to make the best decision for your organization. This includes answers to the five questions listed above — as well as answers to other questions that are important to you.

At CSBusinessScreen.com, we make securing vendor background checks simple and easy. Our cloud-based technology allows you to order new background checks, manage multiple cases, download and review reports, secure e-signatures on consent forms and more.We work with large corporations that are hiring vendors and contractors at multiple sites across a region or across the country, and we also work with single-site organizations that recognize the need for careful consideration of vendors. No matter the scope of your operation or the industry in which it works, our vendor background checks can help protect your brand.Yes, relationships are essential to the everyday operation of your organization. Just make sure that you’re steering clear of risk and liability when you conduct vendor background checks before entering into relationships with new vendors.Want to see how it works? Contact us today for a free, no-obligation demonstration of our vendor background check services.

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