RSMUS.comWatch as we discuss how the Landed Cost module in Dynamics 365 Finance & Supply Chain can be used to capture more reliable information on your trade spend landscape. We’ll also show how RSM’s Trade Profiler tool could be used to uncover potential tariff-related risks while also building a data-driven view of foreign trade spending.
Learn more here – https://rsm.us/3MI0JSz
Learning Objectives:
- Review the Landed Cost functionality in Dynamics 365 Finance & Supply Chain
- Learn how to manage full landed cost for imports in Dynamics 365 for Finance and Supply Chain
- How RSM’s Trade Profiler can help analyze import costs
- Learn what situations Landed Cost and RSM’s Trade Profiler should be utilized
Question & Answer Transcript:
Jordan: We have a question that came in for Mark L. The question is: what if we don’t pay a whole lot in duties or tariffs? Would trade profiler still be valuable for us?
Mark: Not every company pays a heavy amount in tariffs. In fact, most companies, even those sourcing from China. The average duty rate in the United States as a whole was 2%, which was really low. What happened with China was the double-digit increase in the tariff rate on top of the existing tariff that already existed. This woke up many companies that the 25% jump in the tariff completely wiped out the cost advantage of buying goods from China which was the intention of the former administration. The companies that generally pay lower in duties, there is an important consideration that should be shared. If you look at the regulations of the customs and border protection under the trade act of 1930 and the implementation regulations that have evolved over the decades since, they are potentially more punitive toward companies that don’t pay tariffs and the reason being if there is a penalty served for non-compliance, its over the value of the goods so you can appreciate a company importing $10 Million of goods a year and if a $1 million of those goods are subjected to a penalty, at the most basic level can be upwards of 20% of the entered value. That is different from the 2% duty and having to spend two times that duty for negligence if you do pay duty on the goods, but if you don’t pay duty now, you’re talking about $1 million of goods, 20% of that is $200k, just for that one item that wasn’t compliant. So, the companies that don’t pay tariffs and benefit from having zero tariffs on their products have equally if not more risk than those who do play duty due to the penalty structure that currently exists.
Jordan: Perfect. Thank you. This next question may be similar. The question is, if we have a good relationship with our brokers and they have this data, what is the benefit of using trade profiler specialty or in conjunction with our brokers:
Mark: It’s good that brokers do have that data. If you use them to file entries for you, that information is what they then take and turn into a customs entry filing, and that’s what ultimately ends up downloaded into trade profiler or out of the reports from the automated commercial environment. So, the important thing is that you can talk to each of the brokers, and they would give you their slices of the information that they have, but they are not going to give you the entire universe, particularly if you’re engaging half a dozen custom agents, freight forwarders, they won’t have the complete picture. Trade profiler gives you the complete picture without reservation and allows you to work backward and see which of the brokers are doing the best for us and going that extra step. Do they catch someone that is erroneous in the information filed? What do they do to proactively correct that before it becomes a risk to us? That is a good way to measure performance. What is the volume, values, and the different brokers handling? What are the fees they are charging for their services? Trade profiler won’t give you the fees, but it’ll allow you to work backward. They usually charge on an entry basis…$100-$200 is not out of the norm. I rarely see any more. A decade ago, it was $75-$100, but we are well above $100 now on an entry basis. It’s one of those other data points that is great to reference and is agnostic to any particular broker. It allows you to take a step back from that entire vendor base and handle that information quickly, easily, and graphically represent it without having to cobble it together yourself.
Jordan: Perfect, thank you, Mark. We have a couple of questions for Marc Sahlani.
Lacy: What if you have multiple vendors to pay per voyage, how does dynamics 365 handle that?
Marc: That is a great question. Essentially the landed cost module allows you to break out your costs by the vendor and apply them to vendor invoices, so it’s as simple as looking at a list of all the costs that you have accrued throughout the length of your voyage and breaking those out into separate vendor invoices that are handled by dynamics 365 for payment.
Lacy: That concludes our webinar; thank you, everyone, for coming. This video will be posted to our technology blog shortly. If you have questions, please reach out to d365industrials@rsmus.com.
Marc Sahlani
I am a Microsoft Certified technological consultant specializing in Dynamics 365 ERP implementations with experience as both a Procure to Pay and Production lead. My background in engineering, research and development, and business allow me to adeptly design and implement efficient processes for my clients and effectively communicate benefits to both staff and executive employees.