Thinking about going global? Well, it’s not as easy as boxing up your inventory and sending it out in the mail. Exporting can involve a ton of paperwork and require detailed financial audits to several different agencies within the U.S. federal government. Businesses must conform to laws governing international trade, licensing, and security. Non-compliance with trade laws can result in heavy fines and the revocation of global trade privileges, which can adversely impact a company’s bottom line.
“Looking at compliance … when something [new] goes into effect, they don’t care that you didn’t know about it,” says Lauri E. Elliott, president of Conceptualee, Inc., a business incubator for those focused on emerging markets.
Nearly 97% of U.S. exporters are small and medium-sized firms, and most of them are operating under the customs radar, meaning they do all of the paperwork and shipping manually, says Elliott. As other foreign currencies outpace the dollar, demand for American goods will increase. In fact, U.S. exports rose by 16% from January to March of 2010 compared to the same period in 2009 and Small business export loan authorizations increased half a billion dollars, according to the Export-Import Bank of the United States. Those who aren’t prepared to scale up their exports will be at a disadvantage. It will be harder for them to keep track of their shipments, payments, lines of credit, licenses, and customers from each country they ship to without introducing error.
Here are four steps you need to take in order to automate your global trade management system and streamline the process of generating audits, classifying tariffs, and managing import duty across multiple business locations.
Step 1) Prepare to start exporting by investing in accounting software
Consider investing in enterprise resource planning software. Although it is not a necessary element to begin shipment overseas, an ERP system will help centralize the flow of all financial documentation including sales, audits of inventory, and customer and/or supplier payables and receivables so that documents are updated in real time, redundancies are prevented, and archival information is readily available from anywhere. ERP platforms like SAP, Oracle, and Microsoft Dynamics can start at a flat rate of $8,000 to $25,000 for between five to 25 concurrent user licenses. Small businesses can also consider more economical solutions from Intuit’s Quickbooks, BizAutomation.com, or Salesorder.com, which when used as Software as a Service can run for as low as $30 to $250 per month for a single user licenses. Visit Top10erp.org to find an ERP system that fits within your budget, industry, and/or hardware.
Step 2) Get familiar with exporting basics
Compliance with government regulations is the most important aspect of exportation, says Shelvin D. Longmire, international business consultant, and Chair of the Global Entrepreneurship & Enterprise Center at Morgan State University’s School of Business & Management. Exports are regulated by several federal agencies including the State Department, Commerce Department, and Treasury Department, among others. If you are interested in taking a do-it-yourself approach to exporting then you will need to become familiar with the Automated Export System, the Census Bureau’s free, web-based filing system.