What is an Approved Vendor List?
An approved vendor list (AVL) is a list of pre-approved suppliers, vendors, and other sources of goods and services that have been vetted and deemed suitable by an organization. AVLs are typically used by companies in order to reduce the risk of fraudulent or substandard goods and services.
Benefits of an Approved Vendor List
An AVL offers a number of benefits to organizations, including:
- Reduction in procurement costs: Having a pre-approved list of vendors can help reduce the cost of procurement by reducing the amount of time it takes to evaluate and select vendors.
- Improved quality control: An AVL helps ensure that goods and services are of the highest quality, as all vendors have been pre-screened and approved.
- Increased supplier diversity: An AVL can help organizations ensure that they are sourcing goods and services from a diverse range of suppliers, including small and minority-owned businesses.
- Reduction in risk: By having a pre-approved list of vendors, organizations can reduce the risk of fraud and other risks associated with dealing with unapproved vendors.
Creating an Approved Vendor List
Creating an AVL requires a systematic approach that takes into account a number of factors, such as vendor qualifications, performance history, and cost. Organizations should also consider the type of goods or services they need and the potential risks associated with each supplier. Here are some steps to consider when creating an AVL:
- Research: Research potential suppliers to determine which ones meet the organization’s needs and requirements.
- Evaluate: Evaluate each potential supplier using criteria such as qualifications, performance history, and cost.
- Select: Select the suppliers that meet the organization’s criteria and add them to the AVL.
- Monitor: Monitor the performance of suppliers on the AVL and make changes as needed.
An approved vendor list is a valuable tool for organizations to ensure that they are getting the best goods and services at the best price. By taking the time to create an AVL, organizations can reduce costs, improve quality control, and reduce the risk of fraud and other risks associated with dealing with unapproved vendors.