• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Submissions
  • About Us
  • Contact Us
  • Aug 13, 2022
  • Startup
    • Creating a Plan
    • Funding a Startup
    • Franchise Center
    • Getting Your Office Ready
    • Making Your Business Official
    • Marketing Your New Business
    • Personal Readiness
  • Run & Grow
    • Customer Service
    • Human Resources
    • Innovation
    • Legal
    • Operations
    • Risk Management
  • Leadership
    • Best Practices
    • Communication
    • Green Initiatives
    • Open Culture
    • Strategic Planning
    • People Skills
  • Sales & Marketing
    • Advertising and Lead Generation
    • Marketing Innovations
    • Marketing Plans
    • Online Marketing
    • Relationships
    • Sales Activities
  • Finance
    • Budgeting and Personal Finance
    • Payments and Collections
    • Tax and Accounting
    • Pricing Strategy
    • Working with Investors
    • Working with Lenders
  • Tech
    • eCommerce
    • Hardware
    • Software
    • Security
    • Tech Reviews
    • Telecom
  • Shop

SmallBizClub

Helping You Succeed

Home / Run and Grow / Operations / 7 Reasons to Run Background Checks on Suppliers & Clients
7 Reasons to Run Background Checks on Suppliers & Clients

7 Reasons to Run Background Checks on Suppliers & Clients

5001 Views

Jun 19, 2020 By SmallBizClub

Everyone knows companies run background checks on prospective employees. Companies want to be sure they are hiring people that do not have a history of criminal activity and who will positively represent their brand. However, did you know many companies also run background checks on their vendors and even clients? Read on to learn why checking on suppliers and customers is becoming more common.

Check Licenses

Running a background check on a third party vendor is essential in determining a company’s work history and verifying they are licensed. You want to make sure a vendor’s license is current and that they do not have a history of probationary periods from wrongdoings. Consider using Check People to locate all public records with their easy-to-use platform.

Aliases

Many companies will shut down due to negligence, bankruptcy, etc. and then reopen under a new name. A comprehensive background check will pull a company’s complete history, including if they used to do business under a different name. A background check allows a business to ask a vendor about this history and can make them aware of potential wrongdoings in a vendor’s past.

Customer Reviews

Running a background check on a potential supplier should show past customer reviews and give a company an idea of the vendor’s ability to complete contracted work on time. 

The presence of several excellent reviews is essential and shows that a vendor has a history of exceeding customer expectations and is trustworthy. Do not be deterred by 1 or 2 bad reviews. Any company is going to run across a client that cannot be satisfied, and seeing a negative review makes the business more legitimate. Hundreds of five-star reviews could indicate a company is paying for positive reviews.

Shows Due Diligence

According to the Fair Credit Reporting Act, a business must let a vendor know they are running a background check on them. Letting a vendor know a business is serious about protecting their interests, and only working with reputable third-party vendors will often deter untrustworthy companies. The people and companies’ you choose to work with directly represent your company’s values, so you want to make sure you are correctly vetting anyone doing business with or for you.

Background Checks on Clients

Running a background check on a potential client is vital for attorneys, freelancers, and for any industry where taking on a client is a significant investment in terms of time and money. 

Confirm a Client’s Identity

When a person signs a contract under a different name, the contract becomes unenforceable. Many clients get away with free work by signing a contract under an alias and then disappearing once the job finishes. This is why performing a background check before completing contracted work is so important. Untrustworthy clients will:

  1. Sign an agreement under a company name that does not exist
  2. Sign on behalf of a legitimate company without being listed as a principal of that company.

You should be able to find records for your clients on the Secretary of State’s website for your state and find evidence that the company is legit and the individual signing the agreement is authorized to do so. 

Find History of Disputes

When a company takes on a new client, there is always a binding contract that outlines the scope of work as well as how a business will receive payment. While these contracts are legally binding, taking legal action against a client that refuses to pay is a headache. It takes time and money- resources that could better serve a client who will pay. Therefore, conducting a background check on a client can uncover if they have a history of refusing to pay and could indicate to a company that taking on a particular client isn’t worth the risk.

Check People

Check People is an easy to use online platform that helps employers, businesses’ and individuals make decisions based on information obtained through public records. Check People can search millions of records using AI software and compile an easy to read the report with relevant information.

Check People is exceptionally intuitive and can find information with a first and last name. Check People then combs through millions of public records, including traffic records, phone book listings, arrest reports, etc. to give you a comprehensive view into an individual’s past. This is especially important for businesses looking to take on new clients. If you are planning on investing a considerable amount of time and human resources into word for a specific client, you want to make sure they do not have a history of criminal activity that could make collecting payment difficult.

Businesses want to be sure they are protecting their interests when it comes to working with a third-party vendor or taking on work from a new client. In today’s digital world, it is easy to pose as someone else. Don’t be fooled. Run a background check.

Filed Under: Operations Tagged With: Human Resources, Security

SmallBizClub

SmallBizClub

SmallBizClub.com is dedicated to providing small businesses and entrepreneurs the information and resources they need to start, run, and grow their businesses. The publication was founded by successful entrepreneur and NFL Hall of Fame QB Fran Tarkenton. We bring you the most insightful thinking from industry leaders, veteran business owners, and fellow entrepreneurs. That means guides to the complex worlds of financing and technology. It means business owners sharing their personal stories—both successes and failures— through articles, video, and most important, answers to your small business questions. Follow us on Facebook, Twitter, and LinkedIn

Related Posts

  • 8 Main HR Functions To Focus On In Any Business
  • tis-the-season-for-online-scamsSmall Businesses at Higher Risk of Being Scammed than Large Companies
  • Witchcraft or Science – What Makes an ID Scanner Tick?

Primary Sidebar

Random

Brexit: Instead of Deregulation, British Small Businesses Face Uncertainty

Jul 6, 2016 By SmallBizClub

8 Ways to Ensure Your Display Booths in Trade Shows are Effective

Oct 24, 2017 By Usman Raza

How to Find the Best Employees for Your Business

Apr 19, 2017 By Biz2Credit.com

The Importance of Brand Integrity in the Digital Age

May 14, 2015 By Chris Horton

The Top 7 Marketing Offenses I Abhor and Why

Aug 20, 2019 By Elaine Fogel

Footer

About Us

Small Biz Club is the premier destination for small business owners and entrepreneurs. To succeed in business, you have to constantly learn about new things, evaluate what you’re doing, and look for ways to improve—that’s what we’re here to help you do.

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Copyright © 2022 by Tarkenton Institute, Inc. All Rights Reserved | Terms | Privacy