Business relationships vary in shape and form. Regardless of what you do you are a customer, supplier or both. Shared values and principles support growth and help to build trust between stakeholders. I like to think that a win-win situation is an ultimate goal for all.

Avoid stormy relationships

With that in mind, what is the maximum amount of pressure you can put on the supplier who fails to deliver to spec (quality)? There is no rule book that you can follow. Many factors influence the decision-making process. Some of them may include:

• The urgency of the order,
• The scale of the issue,
• Overall performance of the supplier,
• Suppliers support and contribution towards problem rectification,
• Proactivity and resourcefulness of the vendor etc.

The thin line of mutual understanding can break if one side presses too hard. The outcome can result in disappointment for both parties. It may also bear financial consequences.

The power of the Debit Note – please use it wisely

You can argue that every supplier-customer relationship requires constant development and rectifying issues is part of it. It requires effort from all parties. Every now and again you may have to deal with the supplier who avoids admitting liability for the fault. Despite convincing evidence of the fault communication breaks down, support becomes nonexistent and the problem stays with you.

Is it unprofessional? Is it unethical? What damage can it cause to the business relationship?

This is the moment when a debit note raised against pending invoice can work miracles. You need a pending invoice first. Rising a debit note and hoping that the supplier will pay it is a perfect dream. Only offsetting the value against pending payment will work.

You’re the judge, jury and executioner

The results can be astonishing! 9 out of 10 suppliers suddenly come back to the table and re-start the dialogue. Sometimes “shock therapy” can help with struggling relationships, both on professional and on a personal level. It requires thorough thinking and correct implementation to minimise the damage. Yes, the loss is inevitable. Here are some tips to keep the damage under control:

• Be transparent with your decision-making process,
• Keep communication channels open,
• Consider the potential for future business,
• Maintain professionalism at all times,
• Never let emotions speak over logic,
• Seek solutions, not punishment

Have you ever had to take drastic measures against your supplier? Share your experience in the comments below.