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Most, if not all, businesses purchase goods and services from vendors in order to facilitate day-to-day operations and effectively keep shop. Whether you’re purchasing office supplies, tools, materials, or services, it is important to monitor vendor compliance to ensure your suppliers use fair and ethical business practices and comply with industry regulations while working with your company.
What is vendor compliance?
Vendor compliance is achieved when a vendor fulfills a purchase order in a manner that satisfies the purchaser’s requirements. These requirements are typically specified as a condition of the business relationship with the vendor when the purchase order is negotiated. Vendor compliance can include aspects such as:
- compliance with terms of your business agreement
- compliance with industry standards
- compliance with regulatory requirements
Why is vendor compliance important to monitor?
Vendor compliance is especially important in highly regulated industries such as finance and banking, healthcare and pharmaceuticals, government, retail, enterprise, and more. Should a vendor fail to comply with industry regulations, your business risks suffering reputational and financial damage. For this reason, it is important to continuously monitor partner, supplier, and vendor compliance and security posture to maintain the cyberhealth of your entire ecosystem.