How Can You Save If You Don't Consider All Your Options?
A recent article on the Procurement Leaders Network had a very shocking statistic: only 52% of businesses look at customs duties as a potential area for cost savings (according to a recent research survey by Deloitte). Considering that misclassifications alone cause most companies to overpay duties by 7% to 11%, this presents a substantial savings opportunity for any company that imports more than ten million dollars a year. Furthermore, better utilization of Free Trade Agreements can often significantly reduce, if not eliminate, duties on millions of dollars of merchandise. Many companies have doubled and tripled their free trade duty savings (and saved millions of dollars) just through FTA management. And then there's Free Trade Zones that can save you even more! With a little Trade Visibility, you can save a lot of money. So why aren't you?
Categories: Global Trade, Cost Reduction
Tags: Import Export Savings
I'm not surprised that many companies don't pay much attention to duties. The accounting system usually puts them in an overhead account with freight and nobody pays much attention because the person who can do something (the buyer) doesn't see the bill. I actually had a buyer tell me once he didn't care about duties because he was measured on purchased part price.
Thank you for the interesting post! Often time organizations consider their involvement in a free trade agreement to be a daunting task due to changing regulations and new updates. However, for organizations that utilize an automated FTA management solution, they find that their saving opportunities increase by minimizing costs, allowing their organization to expand their business opportunities. Furthermore, free trade agreements open up sourcing options for a business allowing that business to better compete within their marketplace, as well as expand to foreign markets.