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The 5 cornerstones of a strong supplier relationship

Freya Steveni
July 28, 2021
min read
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No matter what size your business is, maintaining good relationships with your suppliers is essential. Misunderstandings and poor communication lead to errors and frustrations on both sides. Ultimately, these issues can hold up your plans, let down your own customers and cost you money. After the impact of COVID-19 on supply chains, there’s never been a more critical time to strengthen these ties.

The 5 cornerstones of a strong supplier relationship

Building strong supplier relationships is a two-way street. You want to know you can rely on your suppliers and they, in turn, need to feel confident that they can rely on you. Let’s take a look at the 5 cornerstones of supplier relationships to swear by.


Avoid misunderstandings that will weaken your relationship by being proactive from the beginning. Make sure both businesses know what’s expected and who’s responsible for reporting on what. Determine your key performance indicators (KPIs), deliverables and who will be communicating with whom.

By nominating a single person to represent your business, communication becomes more transparent and individualised. Appoint one person on your team to be the contact for your suppliers, and ask them to choose one person from their side. Make sure whoever is managing the relationship from your business takes the time to build a personal relationship with your supplier. You want them to feel looked after and earn their trust. Never overlook the power of the personal touch.

If there are signs showing tension in certain areas, like regular inventory count errors, communicate these early. Mistakes such as missing items in your orders or incorrect counts are easier to avoid if lines of communication are established early. Issues are much faster to resolve when there are only two people weighing in.


Stay familiar with your contractual agreement. Are you holding expectations that were never explicitly laid out? Or has your supplier not fulfilled their side? Make sure you’re clear on who is responsible for what. Use the contract as the basis of your discussions to keep everything professional and watertight.

You might find that the original agreement doesn’t go far enough (or perhaps doesn’t exist in written format). In this case, make suggestions about what needs to be promised and delivered to improve your working relationship.

Staying on top of your data and checking in with responsibilities and deliverables can have a massive impact on the strength of your relationship. And more importantly, on the value you get from your suppliers. Make sure you are keeping track of performance and act early if something isn’t right.

Sometimes things go wrong on your end too. On occasion, you might need to reduce or cancel orders because of circumstances out of your control. If that’s the case, be up front with your supplier as soon as you can. You’re more likely to stay in their good graces and they can plan around your payments through honest communication.


As any small business owner knows too well, late payments can be the difference between success and failure. The effect they have on cash flow can’t be understated. With this in mind, and especially if your suppliers are small businesses too, try your hardest to pay on time and in full.

Paying your suppliers when they’re expecting to get paid will put a gold star next to your name. This is one of the easiest ways to keep your supplier relationships healthy and long lasting. And it could lead to better prices on your orders or discounts, especially if you can pay even faster.

Obviously, if we could all pay on time we would. You’re no doubt waiting on cash to come in, too. If you need help keeping up with supplier payments then a flex loan could come in handy. You can access up to £100,000, all at once or in smaller amounts as needed. This flexible tool lets you withdraw and repay on your own terms, so you can stop worrying about the short-term costs of stock or materials. You’ll only pay for the funds you use and your available balance reloads with every repayment.


Cloud technologies can help you automate time consuming tasks like inventory management. Digitising these processes increases visibility across the supply chain and can help everyone prepare. Your record keeping can be improved too, so the orders you put through to your suppliers may be better informed.

Automated accounts payable (AP) software also stops invoices from slipping so easily between the cracks. Besides, automating manual tasks frees up your time to focus on relationship management and strategic planning. Digitising key processes like these helps to prevent errors and both parties can easily see and understand transactions.


One of the easiest ways to weaken or break a supplier relationship is to place all the blame on them when something goes wrong. Try to keep your head and be diplomatic about errors. Obviously nobody wants to have to deal with an incorrect order, but in the long-term it’s worth trying to be understanding so both sides can learn.

Be honest and take an objective and balanced look at the situation. Were both sides communicating clearly? Is there anything you can learn to avoid it happening again? Focusing your criticism on your supplier may sour the relationship beyond repair. Try to open the conversation up. If you recognise your fault in the situation and react respectfully then the future will be smoother.


In business relationships as in personal ones, trust is everything. Focusing on clear and personalised communication will help build faith in your business and improve the level of service you get. Staying open and trying your best to manage payments effectively are the best things you can do to prove you're a reliable customer. Hopefully that leads to fewer errors, and maybe even a discount in the future too.

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