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In recent years, shifts in regulatory processes, legislation, and the prominent presence of Brexit, has made an increasing impact on how businesses deal with cross-border affairs. It’s still quite common to see improper customs compliance procedures result in hundreds and millions of lost revenue in a single year of business. This, unfortunately, is something that’s rooted from a just deliver mentality, wherein large corporations seek to land their goods or services internationally regardless of the cost.
However, it’s becoming more common to see light shed on Customs & Trade, which has historically been a function siloed away within the finance and supply chain teams. More and more, businesses are starting to understand the profitability that proper processes in this area of Indirect Tax can bring.
The shift from logistics and supply chain
What’s frequently been detailed to me, as an outsider looking into Customs & Global Trade, is how this global sector has evolved from supply chain practices. Logistics and supply chain generally work hand-in-hand in the boldest of details, but these areas generally care for the succession of goods from departure to arrival as well as managing all stakeholders within each business transaction.
As a result of trade barriers varying from and revised legislation in cross border transactions, Global Customs & Trade is a complement to logistics and supply chain functions. The emergence of International Trade is credited to the need to oversee compliance practices, ensuring that companies work alongside trade regulations and customs compliance matters.
So what was once a luxury for businesses, is now a prerequisite when trading goods or services globally. It’s no longer about just sending goods from point A to point B. Like its indirect tax counterpart VAT, customs processes must be dealt with in a compliant manner to avoid any discrepancies in international transactions.
Cash cow vs expense
It might be fair to assume that a complete shift towards specialist global trade teams is near and far. What I’ve gathered from some specialists is that a common shortcoming within their departments is a lack of resources.
The operational aspects of international trade and logistics are generally an obligation but as of late, it can be argued that there’s more strategic value when you have specialists that focus their time on export controls, economic sanctions, or even tariff classifications.
The strategic approach that these specialists could bring in annual salaries can save millions in overpaid duties just by applying correct classification codes. It’s not uncommon to see businesses overpaying import duties when sending their goods or services to their global partners.
The amount of money a company invests into a team of specialists could ultimately result in large sums of revenue being saved, thanks to the experience in US trade sanctions.
It’s clear that there needs to be more emphasis on international trade being viewed as an opportunistic approach in generating profit rather than being an expense.
From a recruitment perspective
Indirect tax as a whole is an area of business that’s been booming (you can read more about that here) and global customs and trade is certainly an area that is picking up steam. Specialists in this field are commonly referred to as the unsung heroes of cross border interaction, as the work required asks for dedication.
Commerce and industry remains to be a very job driven market, and as of late, there has been a lot of activity happening since Quarter 1 of 2019 in the world of Global Customs and Trade.
With a high volume of jobs opening up globally, the struggle that many companies are encountering is finding the right person for the job, ie. one candidate may be too heavily weighted towards import with little knowledge of export.
Finding the right balance of skills, expertise, and trainability, in many cases, is near and far. However, it’s evident that more opportunities are beginning to open up for the right talent.
There’s scope for growing business activity within your trade department – specialist knowledge within this field will only bring a more succinct approach to how a business operates within cross border activity. Whilst it might be enticing to offload these responsibilities to the logistics and supply chain teams, there’s a shift in international trade which requires daily attention in how a business operates.
Adding this sort of strategic value to a business, wherein someone can advise on shifting legislations and changing regulations, would keep your business compliant and operating in a manner that would not only create streamlined processes, but profitability. This, in essence, is what organisations look for when making any operational or strategic decisions.
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From boutiques to the Big 4, and start-ups to multinational corporations, Alex manages a diverse portfolio of clients worldwide which has enabled him to develop a vast global network of indirect tax and tax technology professionals in 40+ countries.