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An SME’s guide to approving contractors effectively

Contractors and suppliers provide assets to your business that you couldn’t do without, but along with the products and services that they bring, they could also bring liabilities, problems, or even adverse PR to your business.

Understanding how to approve your contractors or suppliers effectively will become an integral part of running your business, and it all starts with assessing capability:

Assessing capability

This might seem like an obvious place to start, but all too often, even when contractors are asked to do something that they know is outside of their capability, they will attempt to do it because they don’t want to turn down any business.

While sometimes this can work out in your favour, it can be risky and it’s advisable that you have a process in place so that you can effectively assess your possible suppliers. That’s where the following three points come in:


Information is the critical starting point.

Supplier information is needed to establish that a supplier has the capability to provide you with the product or service that you need. This includes checking that they work in the right geographical area, or that they are a large enough business to handle the contract that they are being considered for.

The requirements for the information that you need to gather will vary from business to business, so make sure that you ask questions that are applicable to you and the service that you’re looking for.

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When suppliers carry an element of risk, it’s often inadequate to take their claims at face value and it is essential, and sometimes a legal requirement to verify that their claims are true.

Any checks that you carry out must be evidence based and carried out by a ‘competent’ person. The checks can include a ‘tick-box’ mentality where you assess the prospective contractors/ suppliers to meet third-party certifications, such as ISO standards and other certifications that a business might need to operate within their industry (it can also include health and safety regulations).

This evidence shouldn’t just be checked once a year either, it should always be live, up to date and easily retrievable.


Once a supplier has demonstrated that they are capable of providing the products and services that you need, it is vital that you let them know exactly what you have authorised them for. If this doesn’t happen, they might agree to carry out tasks outside their verified scope, which could bring unwanted risk into your business.

In time, you’ll have a list full of suppliers that you have approved, so make sure that it is shared across your business. You don’t want any department to stray from this list and appoint any non-approved suppliers, for example, if they’re cheaper on price. In the long run, that decision could be more costly to you.

How can Altius help?

The steps outlined in this blog can be time-consuming, especially if you’re a small business and don’t have a lot of time to put aside for approving suppliers. Nevertheless, ensuring that your suppliers are capable of efficiently carrying out their duties should be high on your priorities – and this is where Altius Exigo can help you.

Altius Exigo Essentials is a solution that was designed to give you complete supplier and contractor management that is flexible and transparent – and it can help you to take care of the steps outlined in this blog. Interested? Sign up to our webinar below and learn how Exigo Essentials can assist you with any supplier/ contractor management problems.

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Best practice guide to supply chain compliance now available as a free download.