But there is a question that should also be part of this process:

What risks can this supplier bring to my company?

The answer is not always found in the commercial documents presented during the negotiation.

Tax problems, significant liabilities, lawsuits, irregularities, reputational issues and other factors can affect the contracting company, especially when the supplier is strategic or takes part in critical activities.

The risk does not end when the contract is signed

Hiring a supplier creates a relationship that can last for months or years.

During this period, the contracting company may be exposed to different risks related to the conduct of its business partners.

That is why the analysis should not necessarily take place only at the time of hiring.

Suppliers considered critical may require periodic monitoring, especially when their activities have a significant impact on the company’s operations or reputation.

What can be analyzed?

A supplier compliance review can draw on different sources of information.

Tax clearance certificates and documents, lawsuits, public information, registries and consumer platforms can help build a broader picture of the supplier.

Aspects related to integrity, compliance and legal, financial and reputational risks can also be assessed.

The goal is not simply to find problems, but to identify signs that deserve attention before a decision is made.

Risk rating makes decisions easier

Not all suppliers represent the same level of exposure.

A company can establish criteria to classify suppliers according to their level of risk and relevance to the business.

Low-risk suppliers can follow a simpler process. Situations considered more sensitive may require additional documentation, in-depth analysis or specific mitigation measures.

This classification allows the Compliance, Legal, Procurement and Supply Chain teams to use their resources more efficiently.

Compliance is also a business tool

A well-structured review process should not create unnecessary bureaucracy.

On the contrary: its purpose is to provide information so that the responsible teams can decide with greater confidence.

Executive and analytical reports can help managers quickly understand the main points of attention for each supplier and decide whether the engagement should be approved, made conditional on mitigation measures or submitted to further analysis.

Prevent before you hire

A company cannot completely eliminate all the risks related to its suppliers.

But it can develop processes to identify, classify and manage these risks more efficiently.

MV Law works on tax compliance reviews, certificates, liabilities and contingencies, public database searches, integrity assessments and risk rating, as well as preparing reports and supporting the Procurement, Supply Chain, Compliance and Legal teams.

Knowing who is on the other side of a business relationship is also part of risk management.