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4 Steps to Effective Third Party Due Diligence

It is required to perform due diligence prior to hiring a third party. https://www.crif.in/needs/due-diligence/

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4 Steps to Effective Third Party Due Diligence

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  1. 4 STEPS TO EFFECTIVE THIRD-PARTY DUE DILIGENCE

  2. If you’re like most businesses, you have a host of third-parties that you depend on to support your core business functions. Third parties may include Joint Venture Partners Local Agents Suppliers Distributors Resellers As organizations benefit from multiple connections, they also face the challenges of managing the vast networkof third-party spread across geographies.

  3. Many of these third parties have access to your internal network Some are directly associated with your clients Some are highly crucial for your production process All these factors put third parties in a position from where they can directly affect your business as well as reputation. Hence, it is required to perform due diligenceprior to hiring a third party. Here are the four steps for an effective third party due-diligence process.

  4. Identify The Right Supplier For any business, having the right supplies is critical. This holds especially true for manufacturers, who depend on their suppliers for quality materials and tools to produce top-notch results for their own clients. Meeting your production timetables takes a toll if your suppliers take forever to get you the supplies you need to start work in the first place.

  5. Your supplier should also be able to take your product and service to the market to the right customer and in the right quantity. A few things that you should consider while screening a supplier could be: • Consistency in delivering products & services on time • Certifications & valid documents • Average wait time for an order to be • fulfilled • Checking their past history with other clients

  6. Geographical & Demographical Assessment High-speed internet has become so easily accessible around the globe, that many entrepreneurs assume the world to be one big homogeneous market and project their business to scale accordingly. Many-a-times, this leads to the businesses failurein addressing the real cultural, economic and political differences. In order to avoid the most common mistake of overestimating a market’s potential, do not base the results on your domestic context.

  7. When dealing in a financially volatile foreign market, it is always wise to be prepared for large and frequent economic swings. Fluctuations in currency exchange rates can eat on your profits. The cost of doing business in any market is largely dependent on • Technology • Financial Services • Energy • Local Transportation

  8. Download A Business Information Report You can use this detailed report to help mitigate potential business risks by assessing a company’s operations, financial performance & public filing records. A typical business information report from CRIF provides basic supplier company informationsuch as business registration details, legal forms, and address apart from the financial information. Business information reporthelps you conduct due diligence checks and enable faster decision making without additional risk.

  9. CRIF’s business information report helps in buyer and supplier risk assessment which includes It also consists of a supplier risk assessment rating to understand the risk level of the supplier. Bank details such as accounts, loans along with name, address and branch of the bank used by the company and other historical details about the management. • Expansion Plans Or Project • Identifying suppliers that can pose the greatest risk to their product launches • Identifying Active Suppliers

  10. Review Your Due-diligence Process Regularly There is nothing worse than an effective “initial” review of the due diligence process without any follow up. Commit to recurrent reviews with stakeholders to ensure that your due-diligence process is always aligned with those needs over time. Companies focus so much on the initial screening process that they forget the importance of continuous monitoring of their third parties.

  11. Interested to know how CRIF's Business Information Report can help mitigate potential risks? https://campaigns.crifhighmark.com/BusinessInformation Follow CRIF India on : /CRIF INDIA

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