4 Reasons to Have a 3rd Party Review Your Global Trade Compliance Program
Compliance. Most businesses look at that word and immediately think “headaches” and “waste of money”. Yet there are many reasons why savvy importers and exporters should replace those thoughts with the phrase, “competitive advantage.”
Your trade compliance program is much like your body’s immune system. It is designed to protect you from harm and facilitate the smooth functioning of all critical operations. Just as an athlete needs a healthy immune system to stay competitive, a healthy compliance program will help your company maintain compliance and create a competitive advantage in your market. It can help you mitigate disruptions to operations by improving supply chain visibility and recognize revenue at a higher velocity.
A review by an independent 3rd party will identify your program’s gaps, risks, and challenges based on today’s global regulations. It can determine if your current Global Trade Management (“GTM”) solution is up to date and being utilized to its full capability by your team. It’s important that you engage with experts who understand compliance technologies and industry best practices. These experts can update you on the ever-changing regulations and help your company go from reactive to a proactive and strategic compliance organization. Ultimately, these advantages can help keep costs down and improve the overall operational efficiency of your business.
Athletes constantly check in with their bodies to make sure they are doing what it takes to maintain top performance. So should you, with regular 3rd party reviews of your global trade compliance program.
Why Do You Need a Trade Compliance Program Review or Assessment?
There are many good reasons to review your trade compliance program regularly. Here are some of the most compelling ones:
- Policies & Procedures. Global regulations are ever-changing and compliance programs can quickly become outdated. Moreover, many of the people responsible for creating these policies or procedures are no longer at the company and there is no context for the current state of the program. Reviews provide an excellent opportunity to identify and address gaps, risks, and challenges that improve the health of your compliance program and ultimately can provide a competitive advantage.
- Technology. Companies rarely have budget to purchase GTM software. Even fewer companies have budget to review, update or train on their existing GTM solution. Reviews can identify who is utilizing the full potential of a GTM solution or hiding behind spreadsheets and tribal knowledge. Moreover, a review will identify the status/revision of your solution, missing functionality, outdated configurations, so that you can create a road-map to optimize your program. A review by qualified experts will provide knowledge about the latest GTM technologies to help you stay competitive at every step of the trade process.
- Visibility & Communication. Global trade compliance impacts the entire organization. Often the lack of visibility or timely communication of compliance related activities can quickly result in disruptions to supply chain, delayed shipments and worst of all, unhappy customers. Having an optimized trade compliance program is a key factor in improving communication and realizing supply chain visibility. Reviewing how in sync your supply chain and compliance programs work together will present an opportunity to collaborate internally and set key performance indicators (KPIs) to drive continuous improvement.
- It prepares you, should you be audited. Everyone dreads an audit or worse a fine. Hopefully it will never happen to you, but if it does, it will be a far less heinous experience if you know what to expect and are prepared. A review will help you understand your company’s ability to demonstrate clean and quality record keeping, an audit trail, and support for compliance related decisions which is paramount to ensure ongoing compliance.
How Often Should You Have Your Trade Compliance Program Reviewed?
The frequency in which a trade compliance program is reviewed is similar to the frequency in which a person should have a check-up with a physician. A very healthy and active person would likely have an annual physical. Conversely, a person recovering from a serious illness will likely have several check-ups a year to ensure ongoing health. The better question may be, “is our compliance program healthy and are we comfortable with the level of risk?”
You can do a trade compliance assessment internally or hire a third-party to do it for you. It’s wise to do both. For large, healthy companies, an annual internal review is appropriate, with at least one per year being an external review. Smaller, healthy companies may want to conduct an annual internal review and an external review once every other year.
If the thought of compliance gives you headaches, you’re not alone — but consider how much greater the headaches of noncompliance can be. Consequences can range from fines to unhappy customers to outright being banned from importing or exporting your products. In comparison, taking the time to set up your compliance program properly and reviewing it regularly to ensure that it’s always up to date will not only keep your company compliant, but, create competitive advantages.
And, you don’t have to do it alone. Talk to us about import or export compliance best practices for your team. Or, if you would like to learn more about eliminating your compliance headaches with our Compliance Automation Enablement and Compliance Program Optimization programs, contact us here today.