How does vendor compliance management work?

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Kelly Smith

2 hours ago

4 min read

How does vendor compliance management work?

How to Ensure Vendor Compliance Vendor compliance requires third parties to fulfill all legal and policy expectations in the business relationship. Companies can help ensure compliance by implementing risk assessments, evaluations, policies, contracts, and continuous oversight. Third-party involvement is a necessity in nearly every business. While some smaller organizations might work with only a handful of vendors, large corporations coordinate with thousands each year: Consumer goods company Procter & Gamble (P&G), for example, works with more than 60,000 suppliers, while retail giant Walmart utilizes more than 100,000. However, greater third-party involvement often brings greater risks, requiring proper documentation, valid certificates of insurance (COIs), and compliance with company policies and government regulations. To guard against non-compliance, it is imperative businesses conduct thorough risk assessments and evaluations; track relevant documentation, policies, and contracts; and proactively monitor for deficiencies. What Is Vendor Compliance? Vendor compliance occurs when third parties fulfill all predetermined policy and legal expectations in the business relationship. When addressing a need, companies often contract third parties such as suppliers, manufacturers, distributors, and other agents to provide a product or service that benefits the organization. The work is often contracted, with terms and conditions agreed upon hiring—ensuring the third party delivers the expected goods and services to the consumer in the allotted time. To comply with regulations and requirements, the vendor also provides COIs and other documentation, all of which can be easily uploaded to streamlined software


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