Tiny errors are so costly!

Make no mistake about it a tiny error on your export documentation is a most costly error for your business. Precious time, money and resource can be thrown away when common errors occur. So how can your business avoid these frequent slip-ups?

Be a know it all

Firstly, know the most common errors that your business makes. For example a discrepancy as small as a missing space or comma can render the document invalid. Recognising the errors and knowing the cost incurred of doing so can save your business valuable time and money.  

Letters of Credit

Error: A discrepancy such as mis-spellings on addresses or product descriptions on a Letter of Credit.
Cost: Results in a rejection by the bank and extra charges levied. Unfortunately many surveys reveal that anywhere between 50 and 75 per cent of all Letters of Credit will fail on first presentation. 
Advice: Check the detail and check it again. 

Error: Insufficient time for shipment before expiry of Letters of Credit.
Cost: Your products may not be delivered before the expiry date of the Letter of Credit because of the insufficient time allowed for shipment, thus causing considerable frustration for both the buyer and seller.
Advice: Ensure that the Letter of Credit allows for an adequate amount of time for shipment and completion of the order.

Certificate of Origin

Error: Not providing supporting evidence with a Certificate of Origin.  
Cost: For a Certificate of Origin, providing the necessary supporting evidence such as an export invoice is a must. Without it a Certificate cannot be issued and your shipment will not pass customs. 
Advice: Completing your Certificate of Origin online through your local Chamber of Commerce helps eliminate the likelihood of errors. Also key information is stored, allowing for repeat Certificates to be created without the need for repetitive form filling. 

EUR1 or A.TR Certificates

Error: Not checking that your goods satisfy the rules of the country of origin so that your client can claim preferential import duty.
Cost: The client would have to pay the full import duty.
Advice: When filling out your EUR1 or A.TR forms check that your client can claim preferential import duty - read the appropriate customs notices: 827, 828, 832, 812, etc.

Export licence

Error: Not knowing that your product requires an export licence.
Cost: No delivery or the delivery being held in customs.
Advice: Check that the product needs an export licence at the Department for Business Innovation & Skills website.
Pre-shipment inspection

Error: Not knowing that your product requires a pre-shipment inspection report.
Cost: Some countries require goods and documents to be inspected before shipment. 
Advice: Check the export market documentary requirements with your local Chamber of Commerce.

INCOTERMS

Error: Not agreeing the precise delivery terms between buyer and seller i.e. who pays for what?
Cost: Delays in delivery, client frustration, loss of goodwill.
Advice: Ensure no misunderstandings on who pays for which freight costs and, if you’re not sure, check with your local Chamber of Commerce the most suitable INCOTERM for your consignment. 

Did you recognise more than one error? Whether you did or not the next step will be the same, be proactive and guard your business from these costly errors. All of the above have a common theme and that is they have a huge invisible pound sign hanging over it.  Not only will these errors cost you money but there may also be a long-term effect on the relationship between you and your client. A late delivery of your products will affect both your client’s and your own cash flow. A late shipment which is held at customs or not dispatched due to a spelling error on your export document will mean not only is your client dissatisfied but so are their customers. Your client may have orders ready to be dispatched – no delivery will result in an unmet demand for their customers. A tiny error may unfortunately lose your business a profitable contract.   What ever the error, the cause will most likely be down to inaccurate input of information or a misunderstanding of what information is required. These errors can be avoided by companies.

One such company is Reading-based, Agil, a specialist agricultural company who found that using their local Chamber of Commerce assisted them in the smooth completion of export documentation. Agil operate in a highly regulated market where they have to respond to rapidly changing legislation. Therefore it is essential their documentation is not only in compliance with any requirements but is also received in time to meet shipping schedules or timescales required by the banks to clear the goods with the relevant documents. Their local Chamber of Commerce has expert knowledge and, most importantly, experience when dealing with export documentation and are also aware of the common errors and the consequences of making a small but costly error. 

Product Passport

Treat your export documentation with as much importance as your passport when going on holiday. Just as you get your passport checked and verified at the post office – visit your local Chamber of Commerce who can give your export documentation the once over. Many businesses that use their local Chamber of Commerce now use the online capability to submit the ‘perfect document’ – giving them the freedom to use their valuable time to grow a successful overseas business.  “It’s definitely much easier. You can review everything before you submit it, you can spot spelling mistakes and it’s a lot less time-consuming doing it online. The online system has significantly speeded up the operation, saving as much as three days over the old all-paper system.” Comments Export Co-ordinator Lorna Jack, at Iconic Solutions. Ionic Solutions, Bradford