Is manual research slowing your global trade compliance?

Highlights: 

Reactive compliance is costly: Manual processes consume staff time and create risks of errors, fines, and delays
Tax code changes are overwhelming: With 70 million global tariff changes in Q1 alone, manual tracking is impossible at scale.
Automation enables strategic value: Automated solutions free teams to focus on leveraging trade agreements and finding cost savings.
Manual methods create a competitive disadvantage: Companies using spreadsheets fall behind competitors with automated tools and strategic advantages

Organizations of all sizes, including major organizations, frequently approach global trade compliance reactively rather than strategically. They will tackle compliance issues only when they arise and implement technology solutions primarily to resolve immediate, urgent problems.

This approach is understandable since trade compliance isn’t a core business objective—it’s a regulatory requirement that companies must fulfill to operate legally. It represents a necessary obligation rather than a strategic priority, making it something that simply must be managed to maintain compliance with government regulations.

This ad hoc approach may save  money in the near term, but it relies on humans managing manual processes that eat up staff time and risks errors that can lead to fines, reputational damage, and shipment delays. The compliance team must spend an inordinate amount of time following and updating regional tax and product codes—a process exacerbated by the more products a company has and the fluctuations caused by the current tariff wars occurring in the United States and abroad. Then, there are the FDA regulations on top of U.S. Customs expectations.

Gathering all the relevant data across the company’s disparate systems makes compliance even more challenging and time-consuming.

This data must be unified, another painstaking time-consuming process that could lead to errors—and even the smallest error can cost a company millions of dollars in fines or uncollected fees.

Given this, it’s clear that ad hoc, manual processes for compliance research are inefficient and, in the long run, more costly in terms of both price and staff hours to address trade compliance processes than the one-time cost of deploying an integrated, automated solution.

The overwhelming rate of tax compliance change

“Getting the correct duty rate is a matter of getting the right classification. And the right classification is very complicated. You’re talking about tens of thousands of different codes that could be assigned in the U.S. harmonized tariff schedule,” says Andrew Moxon, Senior Product Marketing Manager with Thomson Reuters.

How difficult is it to keep up with changes today? From January 1 through March 31 of this year, Thomson Reuters made about 70 million changes to our global tariffs data.

With that volume, a company can’t keep up with all the changes when it relies on manual processes, even if the manual part of the process is just collecting and unifying data from different solutions. Staff will be constantly researching the latest information to maintain compliance instead of adding actual value to the company by figuring out strategic ways to offset tariffs and improve the company’s bottom line.

For example, if the compliance officer is spending all their time on research, they won’t be able to help the company efficiently take advantage of programs such as free trade agreements and foreign trade zones, or lead the charge to find new suppliers from countries with lower U.S. tariffs.

“Just from an overall business perspective, going manual just isn’t really a viable option anymore,” Moxon said. “The complexities have gotten too much, the risks have gotten higher, the scrutiny has gotten higher, and the requirements have increased. Automation and integration are just going to be needed going forward.”

Given all of this, the question is: Are manual trade compliance research methods holding back your company? And, if so, what can you do about it?

The solution to manual compliance research: Standardization, automation, and integration

If the answer to the first question is yes, then the answer to the second question is: standardization, automation, and integration.

When combined with integrated systems, automation can collect data from various divisions, immediately update them with the latest tax and tariff rates, and present a unified, standardized picture for analysis. It can even handle, with the help of artificial intelligence (AI), analysis, feedback, and strategic recommendations.

“When you have those tools that can make you more effective and can save you time, your staff can do more things that are higher value and more strategic, while you can continue to get leaner and more efficient,” Moxon says. “If you’re not already doing that, your competitors might be, and they’re getting those benefits and you’re not.”

One Thomson Reuters customer realized significant time savings just by automating the vendor solicitation process for free trade agreements. Before, the company had a six-month “solicitation season.” After automation, it took just a few weeks to obtain vendors’ certifications on where component products are sourced.

Less time on tedious tasks, more time on strategy

By spending less time on tedious manual tasks, compliance staff are freed up to provide real value to the company in the form of strategic advice. In this way, the trade compliance team transitions from being a cost center to a group that creates market differentiation.

“Anybody who’s a professional obviously wants to be seen as a strategic leader and somebody who’s driving value, and these (integrated, automated) tools allow you to spend time on those activities as opposed to chasing down every last change, making sure your spreadsheets are up to date, dealing with the fires that you have to put out because one thing or another got missed,” Moxon said.

The solution for trade compliance research and beyond

Thomson Reuters makes automating and standardizing global trade compliance research easy. Our ONESOURCE Global Trade draws on content from customs agencies and primary sources worldwide, with updates occurring around the clock. That way, your compliance specialists can drive value for the company and find ways to minimize the impact of tariffs.

More than just a research tool, ONESOURCE Global Trade is a comprehensive trade automation solution designed to help multinational corporations increase efficiency, reduce costs, manage risk, and meet import/export compliance regulations around the world.