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Checklist: Finding and choosing suppliers

Select and set up supplier accounts to save yourself money.

On this page

  • Finding and selecting suppliers
  • Managing your relationships with creditors
Payment tips: get the longest payment terms from your suppliers e.g. 30 days and the smallest payment time from your customers e.g. seven or 14 days. Then have a structured payment run, (weekly is good) and pay on time (not early or late).

Finding and selecting suppliers

To find a supplier that suits your business needs:

  1. make a shortlist of companies and rate their services against your priorities (quality, reliability, returns policy, price, location, terms)
  2. talk with the sales representatives to check they are knowledgeable of their products and will keep you regularly updated about new and deleted models
  3. use industry databases and association websites to find lists of local suppliers, including the Industry Capability Network
  4. get personal recommendations from other businesses. Our I am a business owner in Victoria Facebook group always has people willing to give recommendations
  5. do a credit and trade references check, including searching the Personal Property Securities Register (PPSR). If the supplier has a large number of PPSR listings this could indicate the goods they sell are on consignment, have been provided with credit from their suppliers or the business has substantial debt payable within 12 months relating to plant and equipment.
  6. negotiate delivery charges, times and, if possible, delivery when required – called Just In Time (JIT)
  7. regularly monitor the selected supplier(s) against your priorities – as your business (and the supplier's) grows, often the priorities change.
If you chose one main supplier, be sure you have an agreement in place with another supplier in case your main supplier can't provide the agreed service in time. Having one supplier can offer you the benefit of bulk buy discounts and personalised service, whereas the benefit of two or more suppliers means you can compare trade prices and offer your customers a wider stock choice.

Maintaining supplier relationships

After you've started ordering from your supplier it is important to keep your relationship positive. A good relationship helps you maintain stock flow and stay up-to-date with new products and offers. You can do this by: 

  • having regular contact with your main suppliers to discuss the progress of your business (they often may be able to assist with increased credit terms, new products, etc)
  • always paying your invoices by the agreed payment terms 
  • making sure there are processes in place when suppliers are not paid on time ie they can contact someone to discuss
  • communicating any late payments with the supplier and setting up an agreed payment plan.  Summarise this agreement in writing and ensure the senior finance person (or owner etc) receives a copy.