Maximizing value is crucial when companies contemplate bringing on external support for any organizational function. While a company may consider several value categories, this article explores five primary categories – productivity, profitability, image, experience, and convenience. By maintaining a value proposition mindset when requesting consultant resources, selecting consultants, and working with consultants, trade compliance professionals leverage the benefits of external experts.
When is it time to consider engaging an international trade compliance consultant? The simple answer is when the value proposition for bringing in external support outweighs the value proposition of handling the matter in-house. Consider some key times that you may reach this point and the value proposition contemplation that goes with them.
- Dealing with complex and ever-changing regulations: International trade regulations constantly evolve. Keeping up with these changes can be challenging and time-consuming. If your business operates in a highly regulated industry or deals with sensitive goods, such as defense or pharmaceutical products, a consultant can ensure that you remain compliant with all relevant laws and regulations. Balancing daily operations and regulatory change support may prove difficult even for a top-tier trade compliance team.
Productivity may be significantly impacted as in-house teams monitor regulatory change processes, analyze potential organizational impacts, and determine if impacts warrant involvement in the governmental processes (such as participating in public comment) and can take up highly skilled internal resources. This effort impacts the same resources that support existing processes and business requests. Consultants can assist in two primary ways.
First, consultants can provide support for the regulatory change
process. As professionals who work with multiple industries and
business sizes, consultants consider
various factors and tailor their strategies to meet specific needs. They offer expertise and guidance, ensuring a smooth transition through regulatory changes. By staying current with the latest trends and best practices, consultants bring optimism and fresh perspectives to help businesses navigate the complexities of compliance. With their valuable insights and proactive approach, consultants offer reassurance and help organizations embrace regulatory changes as opportunities for growth and improvement.
Second, consultant organizations providing day-to-day operational support can free up internal resources at critical times. Whether internal resources are best used to assist in program deployment or are experiencing a seasonal spike in work, consultants can provide a short-term staffing boost without the expense associated with hiring staff.
- Optimizing procedures and processes: Consultants can assess your compliance processes and identify areas for improvement. They can help streamline your operations, reduce costs, enhance efficiency, and manage global sourcing, transportation, and logistics risks. This can improve profitability and create a competitive advantage in the international market.
Profitability is not often associated with trade compliance. However, the trade compliance team assigns and manages the tariff classifications that determine duty rate, reduced program eligibility, and other regulatory requirements. What if the duty rate of your new product line is incorrect? Prices may be set too high or too low and impact the current year's revenue and future forecasting.
- Managing risk and minimizing penalties: Non-compliance with international trade regulations can result in severe penalties, including fines, shipment delays, and even legal consequences. By working with a trade compliance consultant, you can proactively identify and mitigate potential risks, ensuring that your business operations run smoothly and avoid costly disruptions.
Image: U.S. government agencies such as the Department of Justice issue press releases on enforcement actions with detailed accounts of actions taken by the offending parties. These offenses can lead to public relations challenges, shareholder impact, vendor relations challenges, and consumer backlash.
- Developing effective compliance programs: Establishing robust compliance programs tailored to your business needs is essential for long-term success. A trade compliance consultant can assist you in developing comprehensive policies, procedures, and training programs to ensure ongoing compliance. They can also conduct regular assessments and audits to identify any gaps and recommend corrective actions.
Experience: Just like regulations change, so must effective compliance programs. Getting an external perspective on your program can help you develop, test, and implement valuable enhancements to your compliance program. Leveraging the experience of a consultant can bring significant value to your trade compliance project.
- You don't know what you don't know: It is important to remember that when working with a consultant, you may discover potential errors that may warrant disclosure. While your chosen consultant may be well-versed in the disclosure process, they cannot provide attorney-client privilege. Having attorney oversight of your projects can provide the coverage needed to resolve any discoveries identified in a consulting project.
Convenience: Identifying a consulting/legal team combination that works well and reduces redundant requests can increase convenience, productivity, and profitability.
International trade compliance consultants span the range of highly specialized subject matter experts to broad-reaching trade topic teams. So, how do you know if you have the correct compliance support?
First, you need to evaluate your expectations and needs. What does a successful consultant engagement look like? Is it the delivery time, quality, recommendations? What skills do you want from the consultant team? The better you understand your requirements, the better your consultant can address your needs. At times, the "you don't know" principle comes into play at the beginning of a project. In other words, the project is to identify discoveries and develop improvement and corrective action plans. In this case, you need a team with the methodology and skills to identify potential risk areas and guide you through the options available for correction.
Second, you and the consultant should remain conscious that all parties have some level of bias no matter how hard they try to minimize it. For example, the consultant team may have prior experience encouraging a specific course of action. The client may have internal pressures against that resolution method. This is where communication and collaboration are critical to success. These two areas are important to a successful outcome when selecting a consultant, Other critical areas to consider when selecting a consultant include:
- Expertise and Experience: Look for a consultant with extensive expertise and experience in international trade compliance. They should deeply understand relevant regulations, and industry-specific requirements, and have a track record of successfully assisting businesses in similar situations.
- Reputation and References: Research the reputation of potential consultants by reading client testimonials, reviews, and case studies. Ask for references from past clients who can provide insights into their experience working with the consultant.
- Industry Knowledge: Consider whether the consultant has experience working in your industry. Different industries may have unique compliance challenges, so it is beneficial to choose a consultant who understands the intricacies of your sector. On the other hand, once industry knowledge is confirmed, recognize that best practices from other industries may create a competitive advantage.
- Services Offered: Assess the range of services offered by the consultant. Do they provide comprehensive compliance assessments, training programs, ongoing support, or assistance with specific compliance issues? Ensure that their services align with your business needs.
- Compatibility and Trust: Trust your instincts and assess whether you feel comfortable working with the consultant. Building a strong working relationship based on trust and mutual understanding is crucial for a successful partnership.
- Credentials and Certifications: Check if the consultant holds relevant certifications or memberships in professional organizations related to international trade compliance. This demonstrates their commitment to staying updated on industry best practices.
- Flexibility and Adaptability: International trade compliance regulations are subject to change. Ensure that the consultant is adaptable and can assist your business in adjusting to new regulations or addressing emerging compliance issues.
- Confidentiality and Data Security: International trade compliance involves handling sensitive information. Verify that the consultant has robust data security measures in place and adheres to strict confidentiality protocols.
- Training Capabilities: Training is often a key element in corrective actions. What experience does the consultant have in developing and presenting training? What delivery options can they support?
By considering these factors, you can make an informed decision when selecting an international trade compliance consultant who will best meet your business's specific needs and help ensure ongoing compliance with international trade regulations.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.