In today's dynamic regulatory landscape, the demands on customs compliance are mounting. Coupled with staff shortages in customs knowledge, mistakes can happen. Mistakes in compliance can have costly repercussions. How can businesses navigate this challenge? Can technology really harness automation to mitigate human errors? How can automation in the customs and regulatory compliance landscape ensure consistent, high-quality outcomes?
Just as automation revolutionised industries like automotive, it similarly enhances customs compliance. By integrating technology with regulatory practices, organisations can fortify their resilience against evolving compliance requirements.
The Growing Importance of Compliance in an Evolving Landscape
Customs compliance, which involves adhering to various import and export regulations, has never been more challenging. Mistakes in this domain can lead to significant financial penalties, shipment delays, and even reputational damage.
Furthermore, the shortage of skilled customs professionals exacerbates the situation. Many organisations struggle to find personnel with the necessary expertise to navigate the intricacies of customs regulations. As a result, the risk of human error increases, making the need for a robust solution even more critical. Global trade is becoming more and more regulated, and Customs Authorities are asking for more and more data.
This situation requires resilience in the supply chain, and to build that resilience, technology needs to be leveraged efficiently.
The Role of Technology in Customs Compliance
Technology, particularly automation, offers a powerful solution to the challenges faced in customs compliance. By automating repetitive and complex tasks, businesses can reduce the likelihood of human errors and ensure consistent adherence to regulations. Businesses are looking for real-time visibility and control to negate disturbances in the supply chain.
But what are some of the key ways technology can transform customs compliance: And how can a business start on a path to better leverage their technology?
Starting on the Path to Better Technology Utilisation
The journey towards more effective technology use in customs compliance starts with data. Logistics businesses often focus on the data they receive in its current format, but there is significant potential in revisiting how this data is accessed and transmitted. By working closely with clients, companies can uncover more flexible data-sharing options. For instance, while clients might currently provide a PDF printout of an invoice, the same system could easily generate an Excel spreadsheet, which is more conducive to automated processing.
- Automating Data Handling - Many customs filing software solutions allow for the upload of Excel spreadsheets containing customs data. Some advanced systems can even connect directly to your or your customers' systems to exchange data automatically. This not only reduces manual entry but also minimises errors, enhancing compliance and ensuring timely delivery of goods.
- Client Benefits - While it might seem like additional work for clients to adjust their data formats, the benefits are substantial. Less manual data entry means fewer mistakes, improved compliance, timely goods delivery, and reduced time spent on resolving issues. The ideal scenario is a fully automated system that eliminates manual processes, boosts productivity, and minimises human error. However, not all companies can achieve this immediately. For those still reliant on PDF invoices, continuous improvement is key.
- Overcoming Client Constraints - Not all clients can provide data in the preferred format. In such cases, businesses may need to manually enter information. The most successful companies continuously seek ways to improve their processes. They frequently ask, "Could we be doing this better?" This proactive approach often reveals underutilised capabilities within their software solutions. When asked, many clients admit they are not fully utilising their software's potential.
- Maximising Software Use - Across the supply chain, not just in customs software, businesses should regularly engage with their software providers to ensure they are maximising their technology's capabilities. Software companies have insights from hundreds of businesses and can offer valuable advice on best practices and efficient use of their solutions.
- Pre-populating Data - A critical area for improvement is pre-populating data. Most customs filing systems allow for the pre-population of common, repeating data. Setting up templates for similar or repetitive tasks can significantly reduce the manual workload. For instance, 80% to 90% of the work could be completed in advance, with only variable fields needing manual input.
- Establishing Master Data - Master data management is essential for effective compliance. This involves setting up key information such as customer details, addresses, and product specifications. Regular updates and reviews of this data ensure it remains accurate and relevant, adapting to changes in regulations and business needs.
- Continuous Improvement - As times and regulations change, it is vital to reassess and adapt your setups. For example, when the HMRC removed the 999L waiver, a new dataset had to be applied to each commodity code. Entering this data manually could significantly impact productivity. By setting up master data for products and storing DOC code statements and Y codes against commodity codes, businesses can streamline compliance processes and maintain efficiency.
- Addressing Productivity and Staffing Challenges - Customs processes have traditionally been manual, evolving from paper forms to digitised, data-heavy systems. The UK's exit from the EU led to a sudden increase in the scale of customs operations, exacerbating staffing shortages, particularly for experienced customs agents. Moreover, ongoing shifts in systems, such as CDS, GB S&S, ICS2, and UCC, challenge even highly experienced staff.
- Increasing Data Requirements - New systems and mandatory processes demand more data, increasing the burden on data entry. Less experienced staff take longer to complete declarations and are more prone to mistakes, which take time to resolve. The only way to scale manual processes is to hire more people, which involves long and expensive training programs.
- The Vicious Cycle - This situation can create a vicious cycle that impacts a company's bottom line and the quality of service offered to clients. However, businesses that leverage technology effectively can break this cycle. The most resilient and successful companies are those that continuously seek to maximise their use of available technology and are willing to change their processes when better methods are identified.
In Conclusion
To build resilience and ensure compliance in an evolving regulatory landscape, businesses must embrace technology. Automation, and collaboration tools can significantly enhance accuracy, efficiency, and adaptability in customs compliance. By integrating these technologies with regulatory practices, organisations can not only meet compliance requirements but also thrive.
Master Data Importance
Setting up master data to store crucial information is essential for productivity. Accurate and consistent master data ensures reliable compliance processes and reduces manual effort.
Invitation to Reflect: Regular Review and Adaption
Regularly reviewing and adapting your setup is vital to staying ahead in customs compliance. Technology is continually evolving, and new solutions and features can further improve efficiency. By keeping an eye on advancements and being willing to embrace change, businesses can enhance their compliance efforts and maintain a competitive edge.
In conclusion, leveraging technology for customs and regulatory compliance is not just about meeting requirements; it's about building a resilient and efficient operation. By automating processes, enhancing data accuracy, and continuously seeking improvement, businesses can overcome challenges and achieve high-quality outcomes in the complex world of customs compliance.
Descartes Customs Management Software marks a significant advancement in customs operations, offering a superior alternative to manual processes. Utilising templates and automation, Descartes simplifies customs declarations, boosts efficiency, ensures accuracy, and aids in regulatory compliance. Companies that adopt Descartes’s innovative solution can achieve a competitive advantage in the global marketplace, fostering growth and profitability while reducing the risks associated with manual methods.
Importantly, if a platform is effective for your business and offers built-in features that quickly impact operations by reducing time and costs, it becomes the preferred choice before transitioning to full automation, implementing a new process through a phased approach provides advantages and can help a business transition seamlessly when the timing is optimal.
By integrating cutting-edge technology, robust trade intelligence, and the extensive reach of our network, Descartes offers the industry’s most comprehensive suite of cloud-based logistics and supply chain management solutions. Interested in experiencing the Descartes Customs and Compliance solution firsthand? Schedule a no-obligation demonstration today.