Suppliers, Vendors & Purchasing

1. 1

   Vendor list

   Keep one list of every supplier, subcontractor and software company you pay. For each one, record the contact person, account number, what you buy, payment terms, how you order and who in your business manages the relationship.

   A shared spreadsheet or the vendor section of your accounting software works well. Add renewal dates for software and service contracts so nothing auto-renews by surprise. Review the list once a year and drop vendors you no longer use. This list is also gold if you ever sell the business or need someone to cover for you.

   • List every vendor and what you buy
   • Record contacts, account numbers and terms
   • Add renewal dates for contracts
   • Review the list once a year
2. 2

   Backup suppliers

   Line up at least one backup for every supplier your business cannot run without. If your main lumber yard, parts house or software tool fails, you need somewhere else to turn the same day.

   Open an account with the backup before you need it, so you are not filling out credit forms during an emergency. Place a small order now and then to keep the relationship active. For software, know how to export your data and which tool you would switch to. A backup also gives you a fair price check on your main supplier.

   • Mark the suppliers you cannot run without
   • Find a backup for each one
   • Open accounts with backups in advance
   • Know how to export data from key software
3. 3

   Purchasing rules

   Write down who can buy, how much they can spend and how purchases get approved and recorded. A simple rule might let crew leads buy job supplies up to a set limit, while larger orders need the owner's approval.

   Tie every purchase to a job or a category so you can see true job costs. Ask workers to send receipts the same day, ideally by snapping a photo into your accounting software. Compare prices on large or repeat orders instead of buying from habit. Clear rules stop surprise charges and help you price future jobs correctly.

   • Set spending limits by role
   • Require approval for larger orders
   • Tie each purchase to a job or category
   • Collect receipts the same day
4. 4

   Vendor agreements

   Get the important terms with each key vendor in writing before you rely on them. That includes prices, payment terms, delivery times, return rules, warranties and how either side can end the deal.

   For subcontractors, use a written agreement that covers scope, schedule, pay, quality standards and who fixes problems. Read software terms for automatic renewals and price increases. Ask your attorney to review any agreement that is large, long or hard to exit. A short written agreement prevents most arguments, because both sides know what was promised.

   • Get prices and payment terms in writing
   • Note delivery, return and warranty terms
   • Use written agreements with subcontractors
   • Have an attorney review large contracts
5. 5

   Insurance and data terms

   Ask vendors who work on your jobs or handle your data to show proof that they are covered and that your information is protected. For subcontractors, get a certificate of insurance before they start, and ask your agent what coverage and limits to require.

   For software and online services, check who owns the data, how it is protected and how you get it back if you leave. Make sure the account is in your business name, with you as an owner or admin. Keep current insurance certificates on file and request new ones when they expire.

   • Get a certificate of insurance from each sub
   • Ask your agent what coverage to require
   • Check who owns data in each software tool
   • Keep software accounts in the business name
6. 6

   Ending a vendor deal

   Before you end a vendor relationship, read the contract, line up the replacement and get your data, keys and property back. Check the notice period and any cancellation fees so you leave on the agreed terms.

   Export your data from software before canceling, and confirm the export is complete and usable. Remove the vendor's access to your accounts, buildings and systems, and change any shared passwords. Pay the final bill, get a written confirmation of cancellation and update your vendor list. Leaving cleanly protects your data and your reputation.

   • Check notice periods and cancellation fees
   • Export your data before canceling
   • Remove the vendor's access and change passwords
   • Get written confirmation of cancellation

General information only, not legal, tax or financial advice. See the Disclaimer.