Overcoming Tariffs with SAP and Avalara

Tariffs are significantly affecting companies involved in international trade. Keeping track of changing tariff requirements and the need to implement and undo them quickly presents a challenge for businesses. Making things even more complicated, U.S. Customs and Border Protection (CBP) has increased enforcement activity on imported goods, identifying substantial amounts of owed duties and fees.

These tariffs represent a significant policy change and a compliance burden for businesses. Companies importing affected goods into the United States face challenges, as do those exporting into countries that implement retaliatory tariffs on U.S. goods. Shipping companies have also reacted to the high tariffs, adjusting policies and implementing fees.

Overcoming Tariff Troubles

Many organizations are turning to partners like Avalara to find solutions that help them navigate the complexities of global commerce and adapt to the changing dynamics of cross-border duties and tariffs.

Avalara’s international trade compliance solutions aim to reduce costs, increase revenue, and optimize customer experience. They provide a one-stop shop for end-to-end international trade compliance. The key to handling the constant changes in tariffs and streamlining international trade compliance is customs duty automation.

Avalara helps with global tax and compliance by connecting all pieces of the global tax and tariff puzzle through a suite of global compliance solutions:

• Automated Tariff Code Classification: Avalara automates the assignment of Harmonized System (HS) codes, Harmonized Tariff Schedule (HTS) codes, and Schedule B codes, leveraging experts, deep global content, and the power of AI. This helps improve customer experience by mitigating incorrect classification that could lead to under- or over-charging tax due to incorrect classification. Accurate classification and customs duty calculations help avoid added costs at the border.
• Real-time Customs Duties Calculations: Avalara AvaTax Global Calculations calculates customs duties and import taxes in real-time. Providing a Delivered Duty Paid (DDP) buyer experience with real-time calculations at checkout can reduce the risk of cart abandonment or refused packages and optimize the customer experience.
• Identifying Government Restrictions: Avalara Trade Restrictions Management provides up-to-date knowledge of government restrictions on cross-border transactions, helping businesses avoid products being denied at the border and stay compliant.
• Staying Ahead of Regulatory Changes: Avalara experts and solutions stay on top of regulatory changes worldwide. This suite of compliance services helps businesses stay on top of this rapidly changing environment, giving them peace of mind that they are keeping pace with the changes.
• Comprehensive Global Compliance Solutions: Avalara offers a range of solutions including Avalara AvaTax Cross-Border for cross-border sales and AvaTax Global Calculations for calculating sales and use tax, VAT, GST, and customs duties and import taxes.

By automating compliance with Avalara’s services, businesses can stay on top of the rapidly changing environment and continue to grow globally.

What This Means for SAPinsiders

New problems with tariffs require dynamic solutions. Tariffs have caused companies to rethink international supply chains in new ways. These businesses need agile and intelligent solutions so they can ensure profitability and compliance throughout the process.

Consistency can counteract volatility. With tariff directives constantly changing, companies need consistent solutions that can meet their needs. Automated tariff code classification simplifies some of the complexities of cross-border sales, freeing team members to leverage their expertise on other important tasks.

Trust experience. Lately, tariffs have been a major buzzword, with many organizations promoting new solutions that can help reduce the negative impacts they have. Yet Avalara has consistently simplified cross-border commerce, and its solutions have proven to be effective in maintaining compliance and control throughout vital international commerce operations.