Recently upon requesting ongoing monitoring documentation from one of our vendors, they said the documents could be obtained for a nominal fee. I have not run into this yet. The vendor was acquired within the last year and went private. They are a large, and critical vendor of ours, providing email security/encryption services. The documents I requested were audited financials (or balance sheet/ profit and loss).
Are there vendors you utilize where you have to pay for documentation? My understanding is private companies are not required to provide financials, but I have been able to gather profit and loss / balance sheets from other vendors.
Any thoughts or suggestions?
Tracey L. Campbell
We have a vendor that requires a fee for documents more than one time per year. So far, annual documents have been sufficient for this vendor and for us.
We require all critical and/or high-risk vendors, public or private, to provide audited financials annually, even if it's a summary. We have one (private) vendor that will not provide any due diligence documents, and we are researching other vendors while at the same time trying to offer alternatives to this existing vendor.
We also have an initiative underway to include "right-to-audit including due diligence" language in every contract.
We are in a highly regulated industry and are coming to the conclusion that if a vendor is not willing to comply with our industry's regulations, they do not really want our business.
I recommend you referring to your contract to confirm the information that the third party is contractually obligated to provide. Even though the company would have been sold, the new owner is still obligated under the existing contract.