Vendor financial stability

I was only dealing with one vendor on a cash basis and was considering starting an account when I found out from a customer it was going belly up. The customer who informed me was an electrical contractor that had an account with this vendor. They had no warning at all except the fact that they were billed sooner than 30days and credits due were not being issued. I had other customers with accounts with this vendor and was able to warn them before any purchases were made. I myself will now onlypurchase from electrical supply houses that have been in my area for years and have started carrying networking products.

First of all, do you conduct the same kind of background checks that you do on a potential client? -Short Answer, Yes! In a time when there is either a glut or shortage, the trick is to make sure you are not putting your self at risk with either under or over qualified.

What are the warning signs of vendor financial instability? Billing practices or contracts that are front heavy in fees.

I'm also looking for lessons learned by consultants who got stuck after relying on vendors that wentbelly up or skipped town.

As the dot.coms are falling like flies, so are the traditional morter and brick companies that are suffering from the stock market fallout. All are at some risk but it is those consultants who are agile and open to changes in the dynamics of business today that are able to reduce their exposure and are less likely to be pulled into a week or poorly funded vendor.

What happens when your client fails to pay yet had boasted about having a billion dollar investor but didn't disclose the investor had their funding tied to a performance schedule for the client?