In today’s digital world, information is increasingly available. This puts pressure on businesses to be more transparent in their dealings with customers and suppliers. According to performance management firm Gallup, Inc., transparency in a business-to-business context means companies are honest with their business partners about their goals, their financial needs and requirements, and their level of experience in certain activities.
Transparency calls for making the information businesses need to make good decisions readily available, which in turn positions all parties for effective and efficient trade. Being comfortable in a “putting your cards on the table” mindset promotes openness, good communication, and builds trust and confidence between trading partners.
Demonstrating a willingness to be transparent gets a business relationship off on the right foot, giving it (in theory at least) a greater chance of blossoming into a long-term partnership—particularly valuable when buying and selling perishables.
How It Works
To Charles Brown, director of credit at Ampco Distribution Services, LLC in Riverhead, NY, transparency means an expectation that the companies he deals with—buying from or selling to—will provide relevant and necessary information about their operations, including finances.
“We’re just looking for people who do what they say, when they say they’re going to do it,” Brown explains, and this is particularly appropriate when dealing with fresh fruit and vegetables. “In our business, we’re an unsecured creditor, which means a much higher level of risk. So it’s very important in the perishables industry to have high confidence in the partners you’re trading with,” he notes.
Ampco uses Blue Book Services, Inc.’s rating system, which reassures Brown that a trading partner is willing to be open about its purchases and sales, its financial information, and how it deals with various stakeholders. He also uses Blue Book information to look for patterns in how a company handles disputes and whether it is morally responsible, settling any disagreements and problems in an efficient and honorable manner. This way, he says, the company can avoid any “bad players” in the industry.
Though Brown is more comfortable dealing with public companies than private entities, closely held firms can build trust by sharing information with Blue Book Services and directly with Ampco. Supplying extensive, reliable information “raises our comfort level in extending credit or making credit decisions,” he says.
Emma Gonzalez, controller at Pharr, TX-based London Fruit, Inc., also believes transparency, such as honesty in pricing and billing, can make for better business relationships. “If we have clarity between us, we will do more business.”
