Vendor due diligence in Indonesia is also known as buy-side due diligence. It is a due diligence process conducted on a potential vendor to evaluate possible risks that would occur when there is a partnership.
Through effective vendor due diligence, businesses are able to mitigate threats and avoid litigation. After a thorough assessment of a list of vendors, then only you should choose the vendor you will eventually partner with.
However, while conducting vendor due diligence, you need to be extremely careful of some of the mistakes that most organizations commonly make. Otherwise, you’ll have to pay a price, financially or legally.
Cekindo has put together a list with the top 3 mistakes to avoid when performing vendor due diligence in Indonesia.
3 Vendor Due Diligence Mistakes in Indonesia
1. You Do not Have Complete Vendor’s Information
It is very common that companies ask employees to be in charge of taking care of documents.
Therefore, if you only create a general questionnaire but not a specific one for your potential vendor, it is very likely that the vendor’s employees will fill out the questionnaire with very general information as well. This is the time when hidden risks or warning signs will go undiscovered.
As a result, when it comes to getting information from the vendor, companies must tighten their policy and require detailed and necessary information from time to time.
Then, they will have to analyse the vendor’s data meticulously and thoroughly in order to detect any discrepancies or inconsistencies.
2. You Do not Verify the Information
When you’re looking to partner with a vendor, you must verify all the information given by potential vendors. If you fail to perform the information verification, you’re putting your business in high risks in this partnership.
This is how you can do the information verification: financial and criminal background checks. For example, you can find out if the prospective vendor has been involved in any bankruptcy or legal litigations.
You can go deeper to check on the vendor’s other information if you don’t want to have any issues in the midst of the partnership, especially the legal ones, which are much more complicated than any types of problems.
3. You Do not Act Quickly Enough on Suspicious Findings
If you ever find something that you’re doubtful about, there is a very high chance that some potential issues are there for you to uncover. Therefore, every little issue or disparities shall be followed up diligently to avoid any surprising outcomes.
A small problem that is ignored can lead to a much bigger issue in the future. By addressing the suspicious findings earlier, you can save yourself much time and stress.
Due Diligence Service in Indonesia from Cekindo
Vendor transactions will be the most successful if they have been through a detailed due diligence process.
Cekindo’s due diligence service provides you with comprehensive, reliable background information on vendor’s proposed transactions and helps you make informed decisions prior to taking any critical actions.
We determine the vendor’s process effectiveness, systems, infrastructure and financial conditions in order to conduct the most powerful due diligence.
In addition to our due diligence service, Cekindo possesses integrated one-stop solution, assisting clients with a wide range of business consulting offerings.
Our due diligence team is comprised of experienced financial analysts, auditors, senior management consultants and legal experts. This compelling team will not only add value to your business through understanding the business drivers and reporting on risks and opportunities.
This invaluable approach results in better understanding of the target vendor company and delivers the highest efficiency.
Send in an enquiry or speak to one of our senior consultants at Cekindo.