The term background check refers to the procedure adopted by companies to verify the background and suitability of their suppliers. Originating in the rigorous North American purchasing system, this concept has become increasingly relevant for companies of all sizes, ensuring safer and more reliable negotiations.
Contrary to the idea that only large companies can benefit, supplier background checks are an essential practice for small and medium-sized businesses too. By implementing business rules for selecting suppliers, entrepreneurs can gain negotiating advantages and establish a high degree of trust with their partners.
How to create your Background Check process
1 - Create purchasing rules and policies. In order to professionalize the purchasing process, it is necessary to create a set of rules and policies. These guidelines allow employees to make purchases without depending directly on the partners or managers. Policies include:
- Conditional allowances and approvals
- Types of products or services allowed
- Frequency of purchases
- Spending control and financial management
2 - Acquiring technology
Technology is key to transforming amateur processes into professional ones. Although it is possible to control purchases using spreadsheets, they are less efficient and can lead to more wasted time. Investing in an appropriate technological solution helps to:
- Automate processes
- Ensure compliance with business rules
- Facilitate the management of suppliers and purchases
3 - Establishing controls
With the business rules established and the technology implemented, it is crucial to create controls that allow managers to evaluate the efficiency of the area. This includes
- Performance monitoring
- Identifying points for development
- Tracking the results obtained
"If you don't measure it, you can't get the result."
4 - Review and updating
Processes and rules are dynamic and should be reviewed periodically. Senior management needs to continually evaluate policies and technologies to ensure that they are aligned with the company's objectives and the needs of the market.
Conclusion
Implementing a supplier background check system is a crucial step for any company seeking sustainable growth and secure negotiations. The creation of purchasing policies, the acquisition of appropriate technology, the establishment of controls and constant review are essential steps in achieving these goals.
If this is a subject you need to know more about, for example, how to optimize your purchasing process and implement an effective background check, I can help you and your company come up with a secure and reliable process.