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Performing Expert Due Diligence

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3 August 2018. As a business owner, every decision you make can have a monumental impact on the success (or failure) of your company. This is why careful consideration is a must. When it comes to potential suppliers you are thinking about partnering up with, you need to perform expert due diligence so you can be certain you have found a reliable business that checks all of the boxes.

This is a process of investigation into a company, which should be conducted before any transaction is agreed upon. This will help to make sure you do not experience any issues down the line, which is especially important when you consider how rife fraud is at the moment. With that being said, read on to discover the steps you should take in order to perform expert due diligence.

Have any checks already been conducted? The first thing you need to do is determine whether or not there have been any checks performed already. If you have used a certain platform in order to locate the company to begin with, it is probable that a number of different checks have already been carried out by the platform itself. If this is the case, you should look into the information that is available.

You then need to compare it to your own data to determine whether it correlates or whether there are any discrepancies. You then need to consider how you can go about securing verification that the data and the checks are indeed accurate. Don’t just assume that this will be the case. There are many situations whereby the tests carried out on the suppliers are not accurate or they are out-of-date.

Check public documents and business registrations. You then need to do a check online to see where the business has been registered. This will all depend on where the company is based. For instance, if you are considering a UK-based supplier, you can use the Companies House website to do a search on the business. You should download the business’ latest round of accounts if they are accessible, as well as checking their registered office and registration date.

Verify their trade accreditations.  There are a number of suppliers that will have standards or quality accreditation. This is especially the case if you are looking for a manufacturer. Again, don’t just take the supplier’s word for it. You should verify their accreditation to make sure that it is legitimate. At this point, it is also a good idea to try and find out how long the company has been in business. The sales literature should give you a good indication of this. After all, if a supplier has been in business for many years, it is likely that they are going to utilize this as a point of confidence.

This is less probably for new businesses that have not been established for very long. This is not to say that you need to stay away from any new companies, but you should take all of this into account. You need to make sure that what the supplier is claiming matches up with the verifiable registration information.

Look into the details regarding domain name registration. A company’s domain name should be registered to the business. This is why it is wise to do a quick check of the domain name, making sure that everything is how it should be. If the address is not the same as what is shown on the site or the domain address is registered to a person, you do need to proceed with caution.

Call the supplier and ask some questions. Don’t hesitate to call the supplier and ask some questions. In fact, it comes highly recommended. Once you speak to someone on the phone, you will get a good understanding of the sort of company you are dealing with. After all, if there is no answer or the person on the other end is rude and unhelpful, this will probably make up your mind for you. If you do manage to get through, you should take the opportunity to find out more about the business.

The questions you will ask will depend on the sort of supplier you are looking to work with. If you are looking for a business to provide you with switch rooms for your electrical equipment, for example, you will want to hear about some of the work they have done so far and you will want to find out how they are going to optimize the room to make sure your equipment is safe and works to optimal levels. Aside from this, there are some general questions that you can ask no matter what sort of company you are looking to work with. This includes information about how the company does business and their trading history, as well as details regarding their policies on delivery and returns and their payment options.

You should also ask them about their products. You want to not only find out more about the things they sell but how well they know the market they operate in. After all, a good sales professional is someone who knows the product inside out. They don’t just know how to sell you it – they know everything about it and they believe in it.

Do some online research. If you are satisfied with the phone call you have had with the company, it is time to do a bit of extra digging online. A simple search on Google should suffice. Take the time to read reviews that have been left by customers so that you can find out about their experiences. Rather than simply reading the feedback that has been left on the supplier’s website, you should search for reviews on independent testimonials website. By doing this, you can be certain of their authenticity. Conducting a google search will also enable you whether there has been any unfavourable press about the business. After all, if the company has a history of mistreating their employees or they have had substandard security measures that have led to a data breach, you may want to think about considering other options.

Hire an accountant. The next step is to look into the companies financials. It is advisable to hire an accountant if the deal is going to be a substantial one. If the deal is likely to be two-sided, and the supplier will also be making the most of your product or services, you will definitely need to dig into their accounts and payment history in further detail. This can include running a credit check on the supplier. By doing this, you will be able to find out whether the supplier has a history of paying clients on time. If the company has a poor track record for exceptionally late payments or, even worse, missing payments altogether, then you can save yourself a lot of frustration and monetary trouble by conducting such due diligence now.

Go and meet the business. Finally, there is no substitute for heading down and visiting the supplier and their warehouse in person. However, you will be surprised by how many business owners actually do this, especially in today’s digital age. You should never undervalue just how advantageous it is to speak face-to-face with someone you are working with. You will really get a feel as to whether this is someone you are comfortable working with or not. Not only this but seeing their showroom or warehouse and, therefore, the way they go about their daily operations and the processes they have in place, is the best way to understand the business you are thinking about working with.

While you are there, you can get samples of the products they provide. If you were to request a sample in advance, there is no denying they would simply send you the very best of their products. However, by being there in person, you will get a more accurate reflection of what the company produces on a daily basis.

Hopefully, you now have a better understanding regarding the different steps you should take when performing due diligence on any supplier. If you follow the suggestions that have been presented above, you can validate the legitimacy of any supplier so that you can reduce the chances of anything going wrong during your association.

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