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Podcast Transcript
In this 90-second podcast, you’re going to learn how to recognize the signs your vendor may be experiencing a decline in financial performance.
At Venminder, we have a team of industry experts such as certified public accountants who specialize in reviewing vendor financial statements every day.
Look out for these ten tell-tale signs your vendor is struggling. This is especially important to notice during these changing and challenging times.
- First, cost cuts and staff reductions. When a vendor cuts costs and then reduces staff, this could affect the level of customer service that you’ve been receiving.
- Second, information security issues. Staff reductions will likely sacrifice experienced team members who understand how to maintain an adequate level of controls. You can expect problems to begin showing up in SOC audits, for example.
- Third, rapid turnover. You may notice a rapid churn among executive staff or business lines.
- Fourth, research and product development stalls. A vendor could quit spending on product development, sunset a product or sell their operating division.
- Fifth, inferior service. Less people mean that service may begin to degrade. Be prepared to wait for a call back or, even worse, your customers are forced to wait longer for answers.
- Sixth, bad press and litigation. Declines in service levels tend to result in bad press and, eventually, pending litigation.
- Seventh, merger & acquisition activity. If your vendor acquires or is acquired, money can be tight.
- Eighth, a lack of communication. You may notice a decline in the frequency or quality of communication from your vendor’s account representative.
- The ninth tell-tale sign is slow pay problems. Cascading issues resulting from poor financials can lead to service level gaps and delays in payment.
- And the tenth is poor, long-term financial performance. This is often reflected in lousy earnings quarter-over-quarter or year-over-year.
As you can see, there are a lot of behaviors that point to the possibility of financial stress. Thanks for tuning in; catch you next time!
