By David Rose
As an accounting firm supporting hundreds of businesses, an important relationship that we witnessed being tested in recent times was that of our clients and their suppliers – all due to the rapidly changing environment we find ourselves in.
As the words “We Are All In This Together” were being bandied around, we witnessed the good, the bad and the ugly – and it was clear this was not always the case.
In today’s article we reveal 20 things to consider when reviewing supplier relationships, including some general and specific issues we have worked through with our clients as they continue to navigate the challenges of working with their suppliers and disrupted supply chains.
If you are in that situation, consideration should be given to diversifying some of your supply lines to manufacturers in another country so that when these high-risk situations like coronavirus occur your business is not totally at the mercy of suppliers from one country.
Support could include:
- extension of time for payment
- promotional support
- making available specialist staff to train your team members in the use of the products/services
- advertising and marketing contributions
Businesses should be regularly comparing prices for products/services from different suppliers in an attempt to lower purchasing costs
There are more instances these days where guarantees are not provided.
Does the agreement have a “Force Majeure” clause enabling you to terminate the contract when an extraordinary event or circumstance beyond the control of the parties prevents either party from fulfilling their obligation under the contract?
Always be familiar with the terms of any supplier agreement. Whilst you may be in a hurry to just get things organised and get suppliers on board the agreement is something that could prove challenging.
Keeping the lines of communication open with your advisor remains crucial during these uncertain times. Please speak to your Vincents contact about any concerns you are having, as we have been through a number of general and specific issues with many businesses as they continue to navigate the challenges of working with their suppliers and disrupted supply chains.
An Important Message
While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.