Customs Duty: The Achilles Heel Of The Senior Accounting Officer (SAO)

Why does customs duty slip through the SAO net?

One of the primary reasons for the oversight is a lack of understanding and the sheer complexity of the regulations.  Surprisingly, the professional qualifications required by SAOs do not cover customs duty, yet it is an area where small errors can have big consequences and the rules are constantly changing. This means that it can be challenging for SAOs to stay on top of all the latest developments and ensure that their companies are compliant.

Furthermore, compliance requires the co-operation of business functions outside of the SAO’s direct control, including logistics, procurement, warehousing, manufacturing and sales. These different departments may not fully understand the customs duty implications of their activities and there is likely to be a lack of communication between them and the SAO.

With so many departments involved, senior accounting officers may not have the visibility they need to ensure compliance.  The company’s information systems do not hold customs transactional data, which makes it difficult to see what’s going on.

What can the SAO do to address these issues with maximum time and cost efficiency?

First and foremost, companies need to recognise the importance of customs duty compliance and allocate the necessary resources to ensure it. This may mean investing in training programs for senior accounting officers and other employees, as well as dedicating more staff and budget to customs compliance.  However, the most cost-effective method is to leverage newly emerging technology. CAT360 is a new plug and play customs analytic software which streamlines the process of customs declarations, delivering considerable savings in time and money and eliminating the risk of errors.  It also allows real-time updates which is invaluable if you should find yourself called for HMRC audit.

Stuart Reid, Finance Director, Komatsu, commented:

“We have developed our commercial and duty management systems significantly in order to help us maintain control, but still find ourselves relying on analysing substantial amounts of declaration data in Excel.  We can see the benefit in software systems that give clear visibility of KPIs and this is something we are looking at adopting in the future. CAT 360 software offers significant enhancements in terms of efficiency, error correction and maintaining an audit trail.”

As the global economy continues to become more complex, customs compliance will become increasingly critical to business success. By investing in resources, improving communication, and leveraging technology, SAOs can ensure that they are equipped to handle the complexities of customs duty compliance now and in the future.