Why do businesses maintain records about vendors?

Businesses maintain records about vendors primarily to award contracts to appropriate vendors. This practice helps companies evaluate their vendor relationships based on various factors such as pricing, quality of products or services, reliability, and delivery performance. By keeping comprehensive records, businesses can make informed decisions when selecting vendors that align with their operational needs and strategic objectives. This systematic tracking ensures that they engage with suppliers that meet their standards and can effectively contribute to the overall success of their operations.

While tracking employee performance, analyzing customer preferences, and increasing marketing effectiveness may be important aspects of business operations, these activities are not the primary focus of vendor record maintenance. The essence of managing vendor records revolves around creating efficient procurement processes and establishing beneficial partnerships to foster a reliable supply chain.