In today’s day and age, you can never be too vigilant regarding your company’s security practices. With cybersecurity attacks and other cyber threats on the rise, it’s more crucial than ever to execute regular audits of the apps, services, and vendors your business relies on. Third-party vendors refer to a number of different services and providers that help your company operate efficiently — including internet service providers, payroll companies, tech platforms, and more. Essentially, it is any business or individual you have a working relationship with that contributes to the ongoing operations of your company. A business may interact with hundreds of vendors depending on the size of the company — which can pose a huge security threat to sensitive information.
Supply chain security is a pivotal part of keeping your company’s data safe. Learn how vendor audits, verification, and optimizing your vendor setup process can help protect your company from vendor fraud.
Identify your Active Third-Party Vendors
To begin the verification and third-party audit process, establish and review a list of vendors your company actively uses. This is a best practice you should always do from time to time to not only verify your third-party vendors but also check for warning signs of a fictitious vendor to further protect your company. You can typically detect any fictitious vendors within your accounting invoices. Create a flow diagram that details where your data is being received from and where it’s being stored with each vendor. Within your shortlist of vendors, be sure that you have an address for vendors on file, along with pertinent information such as any changes in leadership, and more. This process should be completed regularly, at least on an annual basis.
Establish a Vendor Verification Process
Your company’s vendor setup process is a crucial time in the overall vendor verification process. At the very beginning of your relationship with a new vendor, you should perform due diligence to understand everything you need to know about the vendor in question.
This includes reviewing their financials, requesting proof of any necessary business licenses or certifications, conducting a background check, and even completing a simple news search. You can use a private investigation firm to complete a thorough, vetted third-party audit of any potential new vendors, as well as to help with the vendor management process as a whole.
Determine your Vendors’ Level of Safety Standards
Once you have taken inventory of the third-party vendors your company leverages, you can identify whether or not those vendors are meeting your qualifications — and adhering to your designated compliance standard. You can leverage the Center for Internet Security’s (CIS) Security Controls to ensure you are taking the appropriate measures to reduce your risk of cyber attacks and make any necessary security improvements. You should also request compliance assessment results, this is known as an AOC, to ensure your vendor is meeting expectations and following all guidelines and online standards.
Determine High-Risk Vendors
You should also identify any high-risk vendors who may require auditing. To do so, consider what the vendor provides, what kind of information and data that vendor has access to, and how sensitive that information is in the event of a security breach. For example, any vendor who may have access to bank accounts, social media or web passwords, or other backend intel would be considered for an audit over your HVAC or maintenance company.
Determine Your Company’s Risk Factors
Below are some of the signs you can watch out for within your third-party vendors that may pose potential risks to your company’s security.
Invest in Private Investigation Services
With cybersecurity becoming increasingly more important, it’s important to have the right experts on your side to assist in your ongoing verification efforts and overall security processes. InQuest Solutions has earned a national reputation for excellence in insurance, business, legal and government communities. For over 20 years, we’ve grown our client base to all 50 states, keeping the needs of our clients at the forefront of what we do. We can help you with verification services, and provide recommendations for organizations looking to boost their vendor management process and combat vendor fraud.