Falsum’s Customs Audit and Export Margin Calculator recaptured an export-oriented company 17% on overseas sales margins, and reclaimed over £22k in overpaid customs duties.
Overview
A UK-based company faced issues with losing margin on global sales due to insufficient customs knowledge. The business sold on Delivered Duty Paid (DDP) incoterms, which, while improving customer experience, was reducing profit margins. The company needed to understand and optimize their customs duties and indirect taxes to improve profitability.
The Challenge
The company struggled with understanding customs duties and indirect taxes, leading to decreased margins on overseas sales. Their DDP incoterms policy, though customer-friendly, was proving costly without accurate customs and tax calculations. This lack of clarity was causing the company to lose its competitive edge and profitability in international markets. They needed a solution that could provide accurate cost assessments and enhance their pricing strategies for global sales.
The Falsum Solution
Falsum addressed these challenges by creating an Export Margin Calculator for the sales team. This tool factored in import tariffs and local sales taxes for 206 countries, providing a comprehensive cost analysis for each product. The calculator enabled the sales team to adjust pricing models for overseas quotes, ensuring that all costs were accurately accounted for and margins were protected.
In addition, we conducted a comprehensive Customs Audit using our proprietary Customs Analytics Tool (CAT). The Customs Analytics Tool analysed:
- the company’s customs compliance using HMRC’s review protocol, and;
- benchmarked the performance of the business against their peers;
- benchmarked their suppliers’ compliance performance;
- benchmarked the speed & accuracy of their hauliers, and customs agents.
This detailed audit identified areas of non-compliance, overpayments, and opportunities for cost savings.
The Results
The export margin calculator enabled the company to save an average of 17% on overseas sales margins. By providing accurate cost assessments, the sales team could price products more competitively while protecting profit margins.
The Customs Audit identified £22k of overpaid customs duties over the past year, and Falsum successfully submitted a reclaim to HMRC on behalf of the business.
The reclaimed duties provided a significant financial boost, and the insights from the audit helped the company streamline their customs processes, ensuring better compliance and cost efficiency. The company was able to enhance its pricing strategies, improve profitability, and maintain a competitive edge in the global market.
The Conclusion
Falsum’s expert advisory and analytical tools significantly improved the export-oriented company’s financial performance in international trade. The savings and reclaimed duties have strengthened the company’s profitability and compliance. By leveraging Falsum’s tailored solutions, the company has gained a clearer understanding of customs requirements and optimized their operations for sustained success in global markets.
