When it comes to outsourcing work for your business, it`s important to understand the difference between a supplier and a subcontractor, especially if you`re based in the UK. While these two terms may seem interchangeable, they actually refer to two distinct types of relationships that you can have with third-party businesses.
In simple terms, a supplier is a company that provides you with goods or materials that you need to run your business. For example, if you own a bakery, your flour supplier is your main supplier. On the other hand, a subcontractor is a company that provides you with services or labor that you need to complete a project or task. For instance, if you own a construction company, you may subcontract a plumbing company to install plumbing in a building that you are constructing.
The main difference between a supplier and a subcontractor is the nature of the relationship that you have with them. With a supplier, you simply order the goods or materials that you need, pay for them, and then use them in your business. With a subcontractor, you enter into a more complex arrangement that may involve several stages of the project. The subcontractor may be involved in the planning, design, execution, and completion of the project.
Another key difference between a supplier and a subcontractor is that suppliers generally work independently of your business. They may have other clients, and they don`t need to be integrated into your company`s workflow. Subcontractors, on the other hand, work closely with your business and may need to be integrated into your project team. This means that you may need to give them access to your project plans and schedule, and you may need to communicate with them regularly to ensure that the project is progressing smoothly.
In terms of legal and financial obligations, there are also some differences between suppliers and subcontractors. Suppliers typically sell goods or materials at a fixed price, while subcontractors may charge different rates depending on the complexity of the project and the skill level of their workers. Additionally, subcontractors may have more legal obligations than suppliers, such as liability insurance and workers` compensation.
In summary, the main difference between a supplier and a subcontractor in the UK is the nature of the relationship that you have with them. A supplier provides goods or materials that you need to run your business, while a subcontractor provides services or labor that you need to complete a project. While both relationships are important for businesses, it`s important to understand the differences between them so that you can make informed decisions about outsourcing work for your company.