How to Close Down Inventory Suppliers

When changing suppliers for various inventory items, there is a need to create a transition from the old to the new that will not interrupt production. This can be managed easily, as long as a few simple steps are followed.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Schedule
• Termination Document

1. Set up the first delivery date with your new supplier. Time the delivery so that you have the chance to use most of the current supply in the inventory. You don't want extra inventory that may be subject to taxes during the period of transition.
2. Notify your current supplier that you wish to terminate the working relationship. Make note of any outstanding orders and confirm that those are still open and valid. If appropriate, include reasons for the termination of the relationship. This may include reasons such as missed delivery dates or pricing.
3. Provide a specific date for the supply account to be closed. This date should be shortly after the scheduled delivery date of the last order you placed with the supplier. Do not assume the account will be automatically closed. Always make a specific request.
4. Work out a schedule of payment for any outstanding balances owed. This will include payoffs for any remaining scheduled shipments. Keep in mind your account will not be closed until all outstanding invoices are paid in full.
5. Request documentation that your request has been received and will be honored. Do not accept a telephone confirmation. A hard copy document, such as a letter on company letterhead, will provide evidence that your request was understood and that compliance will take place.

Tips & Warnings

• When ending any type of business relationship, make sure to document each step of the process. This will come in handy in the event that anyone has questions later about what was and was not done.
• Suppliers may attempt to keep your account open, just in case you want to come back. However, if you are sure that the relationship must end, demand that your account be closed completely.