# Vendor Due Diligence Assistant

> Source: https://bryter.com/de/use-cases/vendor-due-diligence-assistant/

A Vendor Due Diligence Assistant automatically assesses vendors against regulatory requirements and internal best practice guidelines to identify and mitigate potential risks early.

#### Background

Vendor due diligence is the most critical activity in third party risk management as it directly impacts vendor selection, is in many cases a regulatory requirement and is the single best method to mitigate risks early. Vendor due diligence constitutes an important component of AML and CTF and serves to reassure potential buyers that their prospects are financially healthy and present minimum levels of money laundering risk. Today, businesses conduct onerous case-by-case due diligences, overwhelming [risk and compliance](https://bryter.com/team/risk-and-compliance/) teams who need to manage high volumes of incoming requests. 

#### **What does Vendor Due Diligence Involve?**

Depending on industry specific requirements and local regulations, the VDD process can differ greatly across companies. However, some baseline assessments should be carried out as part of the initial reviewing. These would include: 

- Company’s ownership structure 
- Company’s historical financial information 
- Financial indicators, including cash flow, expenditures, liabilities and contingencies 
- Evaluation of business risk, as well as planned growth trajectory 
- Overall compliance performance 
- Legal status, tax information, incorporation documents 
- Information on AML/FT issues, such as whether the company has been imposed sanctions 

#### **Vendor Due Diligence Non-Compliance**

A well-established vendor due diligence process helps companies assess the overall business risk for a venture with a third-party vendor, preventing any risks from spilling over to your company and mitigating risks well before they escalate, and by doing so ensuring company-wide compliance. 

While the supply chain due diligence is a high priority for firms, many struggle to ensure in-depth assessment and risk draconian fines. In 2020, the Office of the Controller of the Currency fined Stanley Morgan $60 million for poor vendor management, citing poor selection of a third-party vendor as one of the reasons for such a measure. 

 
With BRYTER, law firms can build an automated Vendor Due Diligence Assistant for internal use and to provide to clients in order to allow businesses to self-assess their vendors.  

To start the assessment, the user is guided through a series of questions regarding the nature of the business relationships and the types of products and services involved. These inputs then determine the obligations the vendor needs to comply with and whether these requirements are met. Any additional documentation or information can be requested from the vendor directly via the tool.  

As a result, our [**business reporting software**](https://bryter.com/applications/business-reporting/) calculates an individual risk score for each vendor, provides a recommendation and determines whether there are any red flags that would prohibit the purchase. Due to the open architecture of the BRYTER platform, the embedded modular logic of the tool can easily be amended to account for any changes in the law and to provide a tailored solution for a specific business, its vendors, services and products. 

[Sign up for a demo](https://bryter.com/get-demo/) to find out more about BRYTER [no-code platform](https://bryter.com/no-code-platform/). Alternatively, discover our [Data Breach Reporting ](https://bryter.com/use-cases/data-breach-reporting/)assistant and [GPDR Software](https://bryter.com/trends/gdpr-compliance-software/) use cases.