Sure, it’s essential to have contracts with your customers to set the ground rules.

But why would you need contracts between co-workers?

Because it’s spring and love is in the air.

And the best way to keep your company from getting tangled in lawsuits that often run into six figures (and more) to settle is set specific ground rules and require both parties to sign off on it.

A survey last fall revealed that 40% of employees said they’d dated a co-worker at some point during their career. One in four of these employees kept the relationship under wraps.

It’s a given that most companies won’t allow one employee to supervise the romantically connected partner — but it still frequently happens.

But there are serious threats that can undermine the way your business operates.

• What happen if a couple breaks up and it turns ugly?
• What if one of the romantic pair takes up with another employee?
• What if a spurned employee decides to file a harassment lawsuit, or accuses someone of demanding sexual favors?

That’s why “Love Contracts” are gaining in popularity.

It doesn’t have to be anything fancy.

Six rules:

1. No PDAs (public displays of affection)
2. No dating the boss (or someone who answers to you)
3. No gooey or raunchy e-mails using office technology
4. No talk by the water cooler about last night’s action
5. No “dressing for dates” — business attire is mandatory
6. No pouting or temper tantrums if there’s a less-than amicable parting

But just because electronic transactions are becoming more commonplace, you still can’t afford to let down your guard for even one moment when it comes to protecting a customer’s confidential information.

To help determine if you’re on the right page in keeping data safe, there are five key questions you can ask yourself about transactions that occur with your customers.

These questions are both a diagnostic assessment and a wake-up call. They apply whether you’re simply considering upgrading your transaction capacity, or even if you’ve already made the commitment and you could use a guide to setting it up.

Five questions:

1. How likely is it that one of the parties involved in the transaction would try to use a false identity?
2. What would be the fallout if the transaction data got into the wrong hands?
3. How much pain would a security breach inflict?
4. What type of information could be accessed by unauthorized parties?
5. What would be the impact if information being sent to you by a customer or a vendor was intercepted?

Good news: Security experts recommend four basic guidelines for helping to prevent these security breaches.

• Pay close attention to updates and patches for your computer’s security system, and implement as soon as they become available.
• Ask your own IT expert(s) to check your system security, when it comes to your Web browser and e-mail software.
• Passwords are critical. Choose longer passwords that have nothing to do with your name, your company’s name, etc. And be sure to change passwords often.
• Audit monthly statement — from banks and credit card providers — more closely than ever. This is often the first indication for many Purchasing & Procurement pros that something is amiss.

With this front and center in your mind, watch out for these 7 deadly supply chain pitfalls:

• Build first, then wait for the orders to roll in. Do this and you’re liable to end up with a lot of product you can’t use. You know the money meter is ticking away each day product sits on your shelf and gathers dust. Solution: Analyze and monitor your ordering from outside suppliers.
• Too much down time. Staffers should move fluidly from one task to another, and outgoing shipments must be timed for maximum efficiency. For example, say your regular FedEx shipment goes out at 4 p.m. Yet there are almost always a couple of more orders that dribble in afterward. Those orders won’t go out until 4 tomorrow — unless you can adjust the timing of FedEx pickup.
• Efficient, uncluttered delivery routes. When was the last time you took a close look at your delivery patterns? Chances are, there’s been some change in suppliers and needs since then. Study where trucks are going now with an eye toward more efficient delivery, then tighten up those routes.
• No wasted motions. In addition to plotting the most efficient routes around the warehouse for putaway and picking orders, examine the ergonomics of each location. Are workers being asked to pick up too much from the floor? From higher than their head? Spend a few minutes each day observing how workers lift, tote and put down.
• Too much here, too little there. All too often, it’s a normal part of logistics shuffling: Early deliveries are stowed over there, orders going out soon but not yet are stashed here, inventory plopped into a temporary location, until the proper home opens. All of these cost you time and raise the risk of error, which can be even more costly. Clearly designate a place for everything, even temporary stops.
• Space, the final frontier. When you see the same warehouse configuration every day, it’s not unusual to start looking past areas that aren’t quite all that you hoped they could be. Some folks even develop what can be best described as a blind spot. What to watch for: too much open space; too much tight space; too much space on shelves; cartons that aren’t loaded to capacity; even outgoing shipments that aren’t packed to the rafters.
• Errors, plain and simple. Billing errors, incorrect shipments, broken or damaged goods or product, deductions, adjustments, mislabeled product and even simple inventory discrepancies and slip-ups. These all cost you, and will continue to be problems unless aggressively addressed and attacked.

Incredibly enough, there are plenty of folks out there who draw a blank if you ask them.

Here are four directions to set them on the right track:

Loyalty. Sure, it’s OK to ask the boss questions. But you really shouldn’t be bad-mouthing the boss or questioning his or her decisions while you’re hanging out at the water cooler. When times get tough, your boss needs your backing more than ever.

Tell me, tell me. No boss likes to be surprised, especially if the surprise is delivered by another manager: “Did you know one of your people …” It makes the boss looks like they’ve lost control over what’s going on in their own department. Also, if your boss learns of a problem in this fashion, it’s often too late to do too much about it.

Drop the finger-pointing. Bosses don’t want an earful of excuses. They want results, or at least progress. Share that information with them.

Think positive. Don’t be an Eeyore. Bosses need you to keep your attitude positive, at all times. If you’re upbeat and enthusiastic, it’ll rub off on co-workers — and make the job easier for the boss.

Apparently, the teen went online and used his former high school’s purchasing number to go on a shopping spree that would make any dentist smile.

The enterprising youngster put in an order for $37,000 of lollipops and candy bars.

The Goodies Factory in Michigan grew suspicious of the order, and decided to call the high school to verify the order.

Oops.

Police were contacted and detectives told The Goodies Factory to ship an empty box. The teen had listed his home address as the delivery location.

When the box showed up, so did the law.

The 18-year-old was arrested for felony communications fraud.

Still, there’s one unanswered question: What was he going to do with all of that candy?

So it only follows that the better you know how to set the table, the more success you’ll find at the financial trough.

Some experts say the best way to position yourself is to cultivate a working relationship with the “C people” at your company: the CFO, CEO, and/or CIO.

This way, you’re better prepared when opportunity knocks.

In order to capitalize on this seat at the table, consider following this five-step plan:

• Align your goals. The C people are more likely to consider your ideas if those ideas are in sync with their own goals for the company. Not sure what those goals are? Ask.
• Be a Boy Scout. Like the Scout mantra says, Be Prepared. That means don’t wait to pull together detailed information on suppliers, goals, etc. You never know when opportunity will knock.
• When in Rome … Be sure to present your ideas in their language: “For X investment, we will achieve Y return.”
• Get to the point quickly. You never know when your time with C people will be cut short. Get your ideas on the table quickly. Visuals — like a spreadsheet — can help.
• Lend a helping hand. Let the C people know you’re available for questions before they are asked to explain specific proposals. You can make sure the key points are easy to understand and convey.

But there’s also potential for a backlash hiding in your reserve of inactive vendors: Duplication of orders, and even fraud.

Good news: Reducing the risk of these isn’t as complicated as you might think. After all, it’s the fear of complexity that’s keeping many Purchasing & Procurement pros from purging their vendor rolls.

The final decision to keep or cut loose an inactive vendor of course lies within your own company, based on your unique standards.

But there are some general guidelines that can help you pave your own path.

For example, one benchmark for jettisoning inactive vendors generally occurs at 15 months; the most common standard is two years.

Here’s a guide to help your decision-making process:

• Gather the facts. Run an audit of your records. Identify vendors you haven’t used for a decided-upon period — say 14 or 15 months.
• Update the records. Sort your inactive vendors into more easily identifiable categories. Based on industry or individual needs, these categories can include: archiving the vendor’s records; removing the vendor’s name from your live master file; creating a designation for inactive vendors in your file, so they’re easily identified.
• Get everyone on board. Share your findings with the other key players in Purchasing & Procurement, and ask for their input. There might be reasons — not always obvious — why specific vendors need to remain in play, despite recent inactivity.

For some Purchasing & Procurement pros, it’s actually a bit gratifying, as they get the opportunity to land a few body blows on suppliers that’ve been pounding them for the past few years.

Why is there this sense of satisfaction?

For the 2-3 years, suppliers have been jacking up prices to take advantage of the growing economy, which they didn’t hesitate to pass along to Procurement & Purchasing pros.

Now, for some, it’s payback time.

One factor that’s working in your favor: Many suppliers implemented “escalator clauses” in contracts, so they could jack prices based on economic influences.

Now, those same economic influences are driving contract prices down.

If you’re feeling the heat, you’re not alone.

Among the findings in a recent survey by CPO Agenda magazine, procurement managers have:

• felt increased pressure to decrease supply costs — 76%
• more closely scrutinized the financial stability of suppliers — 76%
• asked for price cuts — 73%
• more closely monitored a supplier’s performance — 72%
• switched to cheaper supplies/services/products — 30%
• volunteered to pay earlier in return for a discount — 27%
• directly supported a supplier’s finances — 19%

But beware: Shooting for goals at face value can sometimes blow up in your face, especially if the goal is trimming money from the purchasing and procurement budget.

Case in point: You’re charged with reducing the purchasing budget by a specific amount, $XXX — without any loss in quality when it comes to suppliers and your purchasing performance.

Managers higher on the food chain often believe this is easily accomplished: Replace those expensive, old suppliers with cheaper, newer ones.

Uh, not this time.

Sure, you’re looking hard for suppliers that will out-perform your current suppliers — but they could very well end up being your current suppliers.

Your criteria remain consistent:

• on-time deliveries
• low rates of material defects
• high supplier service performance
• internal customer satisfaction, and
• lower prices.

Good news: You may not need to search far and wide.

Given the current economic climate, it could be an ideal time for you to negotiate with existing suppliers.

They might be more willing to make certain concessions, rather than lose all of your business.

One note of caution: Be sure you’re keeping track — metrics — against benchmarked performance, to prove in dollars and cents that you’ve saved money and improved purchasing and procurement performance.

Your company works hard every day to meet 21st century challenges — but it may be trying to do it still using 19th century A/P practices.

Invoice processing is utterly critical to the success of most companies. It’s also a job that consumes large chunks of Procurement and Purchasing time.

One big reason that invoice processing takes so long?

It’s still, for the most part, paper-based. It’s estimated that 70% to 80% of all invoices still take the mail or fax route. Toss in paper-based recordkeeping and manual data entry and workflow, and it’s no wonder A/P practices are so far behind the times.

The most successful A/P departments have taken steps to automate specific functions.

While there’s an initial cost to automating invoice processing, in most cases it quickly pays for itself.

Among the benefits:

• Cheaper to process invoices. Automated invoicing will trim 33% to 37% from processing costs; it also has helped some companies reduce the number of employees dedicated to A/P.
• Gets you paid faster. Automated A/P processes reduced invoice payment cycle time from an average of 34.4 days to 4.4 days.
• Increased visibility. Usually, you can access invoice status information at any point during the process.
• Staying legal. Automated invoice processing makes it easier for your company to comply with corporate and government financial filing requirements.

Sure, none of this is going to happen overnight.

It’s a big decision for a company to commit to more A/P automation. It’s especially challenging because most companies that lay out the bucks want to see the benefits immediately.

But the most successful implementation occurs one stage at a time. It’s like building blocks, where it’s critical to lay down a solid foundation before you start building upward.

One idea? Start keeping a log of instances when it would’ve been a clear advantage — and money-saver — to have an automated process in place, instead of a clunky, paper-based system.