Customs management is not a place to cut corners. There are no times when a customs officer says “well, close enough!”. You either have everything you need or you don’t. That’s why any customs management solution has a long list of must-haves. There are some aspects that a solution needs to have, or else it is no solution at all.
There are also ways to make customs management a little easier, and to further reduce risk. We can call this the custom management wish list.
The must-haves are what you need to avoid regulatory malfeasance and the fines, fees, loss of license, and even legal problems that can result. The wish list is what you should have to make the process of risk management easier.
Ideally, any customs management solution may have everything you need and want at that time. Understanding how the two categories are related is the best way to stay compliant and keep revenue flowing.
What a Full Customs Management Solution Can Do For You
To create must-have and wish lists, it helps to know all the possibilities. Here is what a customs management solution can do for you.
- Support customs requirements. You’ll want a system that can handle customs requirements for multiple situations, including Free Trade Zones, Bonded Warehouses, Inward ProcessingRelief, and Partner Government Agencies.
- Product classification. Your solution has to easily sort products based on their Harmonized Tariff Schedule or Schedule B codes, while being able to seamlessly and automatically handle mass reclassification.
- Duty calculation. Duty rates keep changing, and are dependent upon your custom requirements and classifications. Your solution needs to be able to determine duty rates.
- Trade document services. A comprehensive customs management solution has to manage documents, including Country of Origin and Commercial Invoice, and export documents.
- Electronic customs communications. This lets you communicate with customs authorities, trade systems, customs warehousing, bonded warehouse, and inward processing.
So now you know the broad outlines of a customs management solution. But how do you get there?
The Must-Haves For Any Customs Management Solution
How do you stay out of trouble in global business? By having a comprehensive system that reduces risks, increases efficiencies, and makes your whole operation run better. That’s why your customs management solution has to have these features and benefits.
It Must Aid in Self-Filing
Every importer is responsible for contacting customs and filing their own documentation. This is a huge area of risk, since it introduces the possibility of human error. Automating the filing process can eliminate these risks.
However, even if you are still manually self-filing, you need a system to clear up risks and enhance security. Filing directly with customs requires an integrated system, with customs responses delivered through the system. Having an automated system prepares you for the rest of the process.
A System That Won’t Go Down
Reliability is an absolute must-have. That’s why it is better to have a comprehensive system that is backed by experience and a large support staff. You don’t want a system that can crash for hours, leaving you unmoored. And you certainly don’t want a custom’s management solution provider that could close shop at any time, leaving you without service, support, or updates.
When your system is down, you lose communication and money. Partner with a solution provider that won’t go away.
All of your shipments must clear. That means having the right paperwork. A customs management solution automates the process wherever possible, making sure that you aren’t held up—and that you avoid fines.
A customs management system also manages all your paperwork, allowing you to automatically address information requests. This can be a huge help during normal operations and at audit time.
Direct Transactions With Importing and Exporting
There’s a basic rule in global business: The fewer middlemen, the fewer problems. Having direct transactions with customs department means eliminating brokers as much as possible. This has the immediate benefit of saving money. It’s also a security measure. If you reduce or cut out the brokers and middlemen between you and customs officers, your data remains with you. It keeps you secure. It is security plus.
So those are the things you absolutely need. But what will it take to make your system run even better?
Your Customs Management Solution Wish List
What do you want to make your global business run better? How do you augment the process of risk reduction? With the right system, these answers go hand-in-glove with your must-haves. Here are the ideal options to make every customs process more efficient and less expensive.
Foreign Trade Zones (FTZ)
These are secured areas in non-US territory and domestic free-trade zones in which you enjoy lower costs and tariff rates (sometimes non-existent rates). Your software for FTZs should work the same as for FTAs. It should automatically know how to take advantage of these zones, and match your products to their best rates.
Free Trade Agreements (FTA)
Non-tariff areas mean lower costs. You want to be able to take advantage of them. You need the right paperwork to do so. Let your system monitor agreements as they relate to your products. These agreements are always changing and require annual updating. Software that can update your whole system automatically saves you money and paperwork.
Seamlessly Fit With Your ERP System
There should be no darkness between your risk management plans and your overall business goals. Security, access control, license management, and more need to be aligned with your technology and strategic roadmap. If they aren’t, you don’t have a solid, holistic business plan.
That’s why your customs management solutions should be able to integrate seamlessly with your ERP. You have the simplicity of having one through-line on one system. This gives you continuity at every stage of your business development.
Keep Everything In-House
The biggest areas of risk in global trade are the cracks between parties. When you are working with a lot of vendors, there are a lot of areas through which information can slip.
Outsourced solutions are risky. The more people involved, the more risks, and the higher costs. Third parties also have their own way of doing things:
- Their own rules, regulations, and compliance requirements may not be at the level that your business requires
- Their manuals, SOPs, and contingency plans may not be on par with your risk management protocols
- Their systems are another end-point of risk, error, and loss
- Their timelines in handling communication, error remediation, contingencies, or issue management may have different priority and urgency that yours.
You should work on your timeline, according to your rules. Your requirements should always be your highest priority-in the end you are ultimately responsible. A comprehensive customs management solution that can stay in-house is a great way to take back control. Not only will it be your ultimate system of record, you control the communication, data, processing, timing, and your global trade business.
SAP GTS Makes Wants and Wishes Come True
While you can get away without the items on the wish list, it’s not a money-saver in the long-term. Upfront savings are quickly eclipsed by the costs of paying more brokers, missing FTA and FTZ opportunities, and the nearly-inevitable fines and fees that come with human error.
SAP GTS gives you everything you need and can wish for in a customs management solution. It automates processes and reduces risks. It also helps you manage the constant change that comes with global business. SAP GTS is reliable solution, and will offer support, service, and upgrades for years to come.
Reliability. Totality. Expertise. That’s SAP GTS. These are also the qualities you need in an SAP GTS partner. You want someone with a perfect implementation track record, who can set up the system according to the needs of your business.