In recent years, the role of Chief Financial Officers (CFOs) has become increasingly strategic. They are no longer simply responsible for managing a company’s finances but are expected to contribute to business growth by ensuring operational efficiencies and identifying cost-saving opportunities. One area where technology can help CFOs make significant gains is customs management.
Traditionally, logistics and tax departments have handled customs management, with finance only coming into play at the end of the chain to process invoices. However, CFOs are now demanding greater visibility and control over spending trends to identify opportunities for cost containment. This need for granular visibility has been met with advances in technology, which enable CFOs to understand spending practices across their organisations. By leveraging technology, CFOs can achieve increased visibility and control over customs management, leading to savings of up to 90% on customs declarations.
One such technology solution is the CAS digital platform, which is designed to simplify customs management for multinational companies. It works towards automating customs and trade compliance processes, going beyond traditional core transactions to administer complex special customs procedures. This can help CFOs eliminate risks introduced by human error and manual processes, enabling customs managers to have an integrated view of trade operations across the whole business. This shift in perspective can transform customs from a cost centre to a strategic player.
To further understand the impact of digitisation on customs management, let us look at the top reasons why investing in a Customs Management system is essential for businesses:
- Increase Visibility and Control over Spend: Investing in a customs management system allows CFOs to make “surgical” rather than blunt cuts, giving them greater control over spend.
- Mitigate Risks around Supply Chain Disruption and Business Continuity: Companies can mitigate risks around supply chain disruption and business continuity, leading to cumulative cost savings and efficiencies across the entire supply chain.
- Maximise the Efficiency of Existing Working Capital: Automating customs operations can help companies allocate capital more efficiently, maximising existing working capital.
- Insights and Analytics: Generate insights and analytics on customs compliance performance, leading to data-driven decision-making and continuous improvement.
- Reduce Supplier and Third-Party Risks: Proactively identify and reduce exposure to such risks.
- Ensure Real-Time Customs Compliance, Fraud, Ethical Sourcing, and Other Risks, ethical sourcing, and other risks. Reduce exposure to fraud and other risks with
- Improve Forecasting and Budgeting Accuracy: Automating customs management provides increased visibility in the spending cycle, avoiding “surprise” cash needs.
- Enable Long-Term Cost Savings: Software-enabled predictions for duty payment optimisation can provide long-term cost savings, with companies saving up to 40% on average.
- Drive Competitive Advantage: By maintaining close proximity to the existing supply chain with customs automation, businesses don’t have to change logistics flows or risk delays in the clearance of goods.
In 2022, most companies were able to push input price increases onto their customers. However, for many, this strategy will take a dramatic turn by the end of the year. According to a May 2022 Gartner survey of 182 CFOs, 63% of CFOs believe their company will run out of room to pass on rising input prices and will refocus their strategies on cutting costs and seeking efficiency gains through automation. Unfortunately, those still using traditional processes and managing customs within silos will be at a distinct disadvantage. “CFOs are increasingly looking to the long-term benefits of digital investments, including automation, that can permanently reduce the cost of doing business”.