What are the Steps in a Vendor Management Audit?

Whether you’re onboarding a brand new supplier or continuing your interactions with a current one, performing a vendor audit is key for ensuring long-term security with your third-party relationships.

Vendor Audits

Companies in the past were satisfied with merely sending out a vendor assessment questionnaire to each of their suppliers. But as the risk landscape changed and businesses became more cautious of the dangers of vendor risk, assessment audits have evolved and vendor management requires more due diligence than ever before. Below are a few important steps to take. 

Vendor Management Audit Checklist

1. Do your Dues

Start your due diligence by collecting information about your vendor’s risk posture on questionnaires and from external sources. Develop assessment criteria unique to your business goals. High-risk vendors should be subject to greater scrutiny than vendors that don’t have access to sensitive company information.

2. Move on to vendor onboarding

If a vendor didn’t meet your risk standards, you can request additional assurances until you are satisfied with the information and practices provided. After a vendor is approved, start the contracting process. This is a written agreement that guarantees a certain level of security is upheld by your vendors and sets access and security controls across your system.

3. Continuously monitor and assess

After the initial onboarding, the job isn’t over. At quarterly and annual intervals (in addition to after cyber incidents), you need to perform continuous monitoring and upkeep of the controls you have set through regular assessments.

A Vendor Audit Includes:

• Review of the third-party’s risk and financial history
• Analysis of vendor’s transactions
• Interviews with third-party vendors
• Vendor questionnaires
• Compiling a contract that is commensurate with the vendor’s risks
• Continuous monitoring at regular intervals throughout the contract cycle

How to Facilitate Your Vendor Management Audit Program

Keeping all your vendor contracts under one roof makes them easy to access, analyze, and report. Centraleyes can help you evaluate contract performance, and track KPIs to attain the best results. Schedule reminders so that you stay up to date on key deadlines.