Trusting Third-Party Vendors – Risks and Solutions
Let's face it — at some point your business is going to have to rely on the services of another. For most businesses, it's inevitable and necessary. Whether you are a contractor dependent on subcontractors, a food sales business dependent on transporters, or any business that utilizes a third-party staffing agency, there will be a time in which your business will interface with, or utilize the services of, a vendor.
Reliance on third-party vendors naturally comes with risks. If you are a general contractor, you are typically responsible for all work performed by professionals under a contract — if an inadequately licensed subcontractor performs an incorrect installation or damages property, you may be legally liable. In the case of food sales, every hand that touches your product en route to its final destination carries the risk of resulting in an unsatisfied customer, ultimately affecting product reviews and revenue. If yours is a business that makes hires or outsources its human resources via the services of a professional employer organization (PEO), you want to sleep soundly knowing that such legally sensitive business matters are being handled by a licensed and reputable organization.
Because the legal status of your vendors can have major effects on your operation, it is important to verify that they are appropriately licensed and compliant with the regulations of their industry. This means first researching what the industry regulations are, whether there is a license specific to the vendor with whom you are working, and whether or not that vendor possesses that license in good standing. There may be multiple professional licenses and regulations federally, at the state level, and at the local level, with which your vendor will need to comply. Further, verifying that a vendor is fully licensed at one time does not account for the fact that licenses can expire or be revoked due to disciplinary action; it is important to verify on a periodic basis that your vendor's licenses are in good standing with all applicable regulatory boards throughout the duration of your working relationship.
LicenseLogix's Vendor Verification Plus is your turnkey solution for confirming that your vendors are compliant. Our proprietary database is updated constantly with new and developing professional regulations across all major industries, and our team of experts has the resources to verify the license status of every vendor with whom you do business, delivering results in the format of your choice. Don't put the success of your business in the hands of an unverified entity. Contact us for a consultation.