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Hiring expert compliance professionals and sending them to training seminars and conferences to keep them on their edge is laudable, but it’s not a solution if they return to a workplace that relies on the totally inadequate compliance tool known as the spreadsheet. Spreadsheets, designed for simple accounting calculations, might be reasonable for forecasting and budgeting, but they were never designed for applications that required advanced data management activities, including trade compliance demands, especially when the mere act of sorting can corrupt all the data in the spreadsheet.
That’s why I was very pleased to see these facts echoed in a recent Industry Week article on Global Trade Management (GTM) technology that was a call to action to importers and exporters. Good GTM, which delivers tangible ROI, enhanced revenue, and more efficient internal processes, overcomes the failings of spreadsheets and greatly reduces the risks of non-compliance (which can include massive fines and penalties).
Furthermore, GTM can allow importers to maintain more control over the process. They can verify classifications, insure filings are made on time, and track VAT that your company may be eligible to reclaim. GTM also gives importers and exporters:
- advanced cost-estimation capabilities,
- a complete archive of electronic filings at their fingertips,
- automated transaction processing, and
- true global visibility, where real-time visibility and exception monitoring allows problems to be solved before they become catastrophic.
For more information on the importance of global visibility, see the Illumination on why you need trade visibility and the white paper on why you need to close the loop with entry visibility.
Today’s guest post is from Clay Perry, SVP of Global Markets, of Integration Point, Inc.
It’s more than just an item master. It’s definitely more than just a spreadsheet. A
Global Classification platform includes various and multiple forms of classification data,
stores required documents, provides up-to-date trade content, and provides a
centralized, web-based solution that all trading partners can access. Having trouble
selling the need for a Global Classification platform internally? Below are 7 great
reasons why any organization needs, and can benefit from, a Global Classification
- Centralize product databases
By consolidating all product classification databases
into a central, shared repository, you eliminate the all too common practice of using
spreadsheets to manage a company’s multi-national parts list. As a result, the
centrally controlled classification database reduces errors, increases internal and
external communication, strengthens compliance, and improves the timeliness of the
information shared with external trading partners.
(Remember, up to 90% of spreadsheets contain non-trivial errors.)
- Increase visibility
Managing all classification data in one location provides visibility
into when additions, changes, or deletions to the classification data repository are
- Improve compliance across the supply chain
Providing on-demand availability
to the classification database via the web ensures that every trading partner has
access to, and uses, the same classification data at every stage in the supply chain.
- Minimize risks and/or delays in the supply chain
Having the correct
classification data in an easily accessible platform reduces the chance of shipments
being delayed in Customs resulting in demurrage and other late fees.
- Share classification data to maximum compliance in other trade areas
Involving members from various areas within the organization — from the shop floor
to shipping department to accounting — provides better classification data. By
collecting input, facilitated by an online tool, you ensure that all product data used
for classification determinations is thorough and timely.
- Demonstrate reasonable care
Complying with government regulations, such as
the Modernization Act for US importers, is required by all importers and exporters.
This means organizations must show they demonstrated reasonable care when
deploying a solution focused on managing and maintaining accurate classification
- Manage trade preference programs applicability
Utilizing a Global Classification
platform, organizations eliminate the possibility of missing duty savings opportunities
caused by not flagging the products in the classification database and sharing that information with Customs Brokers that these products are eligible for Free Trade
For more information on closing the loop with entry visibility, see the white-paper. For more information on why you need trade visibility,
download the Sourcing Innovation Illumination on Why You Need Trade Visibility.