Vendor Due Diligence / KYC
Companies should be aware while conducting business with different vendors as well as venturing into partnerships & especially offering credit to business Clients. Due Diligence helps in providing accurate information about companies & partners which helps in avoiding loss of capital & bad debts including other legal matters.
The scope of due diligence for vendor / partner / customer is vast and includes qualitative and quantitative factors:
- Verification of business, company or organization existence as well as the reputation of the business in the market place
- Establishing Legal and statutory compliance of a vendor and so checks on misappropriation of funds, money laundering, siphoning of funds
- Labour and environmental related issues checks
- Qualitative management report analyses the credit history/defaults of vendors
“Do you know that many fraudulent profiles go unnoticed when existing employees are unverified or when companies don’t check the backgrounds at regular intervals Morgan King “