Which supplier terms has your business already accepted?

Every business has a good answer to what its own terms say. Almost none can answer what terms it has agreed to.

The asymmetry is structural. The documents you issue go through a process, because somebody built one. The documents you receive arrive as attachments to emails about something else, and the process for those is whoever opened the email.

Where the commitments actually come from

Four channels, in rough order of how much they cost and how little attention they get.

Signed supplier agreements. The visible ones. Usually fine, because a document with a signature block gets treated as a document.

Click-through terms. Software, freight portals, marketplaces, payment platforms. Somebody ticked a box during setup, three years ago, and nobody has read the version that has replaced it since.

Terms referenced on an invoice or a delivery docket. A line saying supply is subject to terms available at a web address. Whether that works is a question for your adviser; whether anybody in your business has read them is a question you can answer today, and the answer is usually no.

Purchase orders you accepted. A customer's PO often carries their terms on the back. Accepting the order can accept the terms with it.

The count is findable

Take the last twelve months of accounts payable, sorted by spend. Work down the list until you have covered most of the money, for most businesses that is twenty to forty suppliers, not hundreds.

For each one, record what governs: a signed agreement, their standard terms, your terms, or nothing anybody can produce. Four categories, one column.

That is a day of work and it produces something no meeting can. Most businesses discover that their largest supplier relationship by spend is running on a document nobody in the building has read.

The four things worth locating

Once the set exists, there are four provisions worth knowing the position on, because they are the ones that bind quietly.

Automatic renewal, and the notice window to stop it. The single most common source of a commitment nobody chose.

Term length. Anything beyond a year deserves to be a decision rather than a default.

Price escalation. Whether the supplier can move the price, by how much, and on what notice.

Security interests. Retention of title, charges over goods, personal guarantees. These do not appear in the price and can matter more than it.

Record where each sits. Do not record what it means.

Stop the leak at the intake point

The audit is a one-off; the fix is a habit. Anything arriving with a signature block, a terms link or a tick box goes to one intake point before anybody agrees to it. The intake point does not need to assess it. It needs to log it and route it.

That single rule is what stops the next three years generating the same pile. Without it the audit is a snapshot, and you will do it again.

Do it before you need it

Two moments force this work: a dispute with a supplier, and diligence on a sale. Both are the wrong time. In a dispute you are reading the document for the first time under pressure; in diligence you are producing it for somebody whose job is to find what is missing.

Done deliberately, it is a day. Done under either of those, it is a fortnight and a worse mood.

The boundary

Finding the documents, recording what governs each supplier, and locating the renewal and escalation provisions is administration.

What those provisions do, whether the terms were validly incorporated, and what any of it exposes the business to are questions for your own external adviser.

The list is what makes asking affordable. Thirty suppliers with the governing document identified and four provisions located is a bounded question. "Are our supplier arrangements alright?" is not.