One of the most successful business relationships I had with a client was largely in part to their insistence on written procedures. We worked long and hard to create concise documents that indicated the responsibilities and expectations of each party which included activity flow charts and step by step processes. We agreed on key performance indicators and benchmarks to gauge our achievements. We also agreed on a process to change the document as it had to remain fluid and relevant to reflect necessary alterations or additions as dictated by the business needs. These written instructions guided the way we conducted our activities and provided clear direction to their company and ours. If an issue did arise, our first course of action was to consult our procedures to ensure that instructions were properly followed. In most instances, it allowed us to resolve issues quickly by returning to the more important tasks at hand ? transporting their goods and setting up a Customs clearance.
As an importer, you can also employ this strategy to reap these benefits. The following are the reasons why a company should document their importing process. These are in no particular order, as I am sure you will agree that the hierarchy will change depending on your company?s needs, importing complexity, and current hot issues at hand.
- The inclusion of all parties: The document could be limited to your interaction with your customs broker however it could also include vendors, carriers and warehouse operators. In other words, anyone that could have an influence on your shipping and customs clearance can be included.
- Avoids finger pointing: By clearly defining the processes and responsibilities you avoid casting blame needlessly. Everyone will know what their role is and the performance expectations.
- Highly recommended by Canada and U.S. Customs: If your company is audited by either Customs agency, this will demonstrate your willingness to be compliant with Customs regulations. Companies who have invested the time to create and maintain standard operating procedures will have better success at surviving an audit...probably because they discovered errors before Customs knocked on their door and did something about them!
- Avoid penalty action by Customs or other governmental agencies: Avoid penalties, fines and other financially painful experiences as both Customs agencies in Canada and the U.S. can charge you heavily if you fail to obey the rules. In the last year we have seen instances of companies charged $2000 to $50,000 for a single infraction. If none of the other reasons make sense, this one will as it has a direct and tangible impact on your bottom line.
- Avoids problems with ?tribal knowledge?: You and I both know that talk is cheap and easily misconstrued when it's passed along through many people. Of course, it only gets worse when people change job functions, and then information is further diluted when you include business partners from outside your company. The initial work to create written procedures can be labour intensive but the time savings and removal of frustration will pay great dividends down the road.
- Use as a training tool: Anyone with written procedures will find it easier to train new employees. In addition this would also apply for vacation coverage. The same can be said for the introduction of new business partners involved with your importing process.
Can you use a canned approach to this? Let me ask you a question... is your company the same as 100 other companies out there? Of course not! That's what you need to develop something that is unique to your importing process and the methods employed with your vendors, carriers and customs broker.
If you need more information, please send me a message. In the next blog, we'll examine the specific topics that you should include when documenting your importing process.