For any company that distributes goods internationally, import/export compliance is a top concern. Import/export laws, standards and guidelines in various countries around the world add to complexity for these types of business processes. Customs work, accommodation of international taxes and tariffs, and significant documentation requirements often make importing and exporting rather labor-intensive.
New types of distribution ERP solutions help companies with the nuts and bolts of import and export compliance. These full-featured software platforms allow managers to automate some of the laborious processes of complying with specific import and export laws. Other types of software like warehouse management and inventory management can also help with tracking. These related tools can not only drive efficiencies, but collect the kinds of information that have an impact on compliance.
Make sure your ERP helps with import and export compliance by gathering your needs in an ERP Software Requirements Template
Building an Import/Export Compliance Program
For a company of any size, a consistent importing and exporting process is important. Without a rigorous and consistent process, whoever is in charge has to re-create the compliance process every time, which can lead to gaps, errors and malfunctions.
One of the first steps is to build that consistent process and keep protocol records handy. This resource from Shapiro goes over some of the process of building an import/export compliance program.
Aspects of Import/Export Compliance
When building the import/export compliance program, business leaders should be thinking about the concrete costs of non-compliance. For example, Importer Security Filing (ISF) rules are important because violations can trigger penalties of up to $5000 each. Companies have to deal with statutes like 19 US code 1484 – ‘Entry of merchandise’, where companies are required to:
- file items with the Bureau of Customs and Border Protection
- provide import activity summary statements
- file or electronically transmit documentation to the owner or purchaser of merchandise
These are just some of the requirements that import and export companies need to observe in order to stay in business. These companies have to research the relevant work of U.S. Customs offices, or get professional consultants who can help them navigate the minefield of import and export law.
Features of Distribution ERP for Import/Export
New distribution software and ERP tools come into play by offering companies the ability to standardize and universalize import/export processes.
For example, a vendor may create a specific distribution ERP database for wholesale distribution that has multiple custom fields attached to a table. This can function as an essential checklist — where researchers can find that instead of a null value, an employee has added some value to the table to show that a key customs document has been filed.
ERP systems also shuttle valuable information from one part of the system to another, to give business leaders more information about everything the business does, including import/export compliance. Some of these custom fields from the database can be gathered into a visual report, which shows how each particular package or shipment has been duly authorized by customs, and is entirely compliant with import/export law.
Many of the features that distribution ERP offers for import/export clients are related to the ability to track physical goods, and create digital environments in which it’s easy to investigate issues. Bar code scanning systems can identify the location of physical packages. The kinds of custom databases mentioned above can add data values to each of these records.
By building a more detailed view of customs work and other relevant issues, distribution ERP solutions really help companies master import/export compliance and achieve universal success, so that they can focus more attention on other aspects of the business like core production or product development.