Coffee importer was billed for DKK 27,000 - this is how you avoid being in the same situation

Ole Dalgas

Marketing

Intro

Small coffee business receiveda large bill based on a typo en stor regning på baggrund af én enkelt tastefejl 

You can abdicate the workload – but never the responsibility

Why do the errors occur?

BDO’s customs expert determines the consequencesne

Avoid errors in your import and export documents

Intro

Most people can probably reflect on the irritation of having forgotten the parking disc when shopping after a long day at work. There is a fine under the windscreen wipers, and it is settled at box 1. Slavery.

Imagine then that you receive a fine of DKK 27,000 because one number is missing from a long item code that appears on a document that you did not even fill in yourself. That was the reality for Rune Sandholt, who runs the coffee company NGUVU.

A study by SKAT shows that more than 50% of all customs documents contain errors – and errors often equal large fines, detained goods and dissatisfied customers. However, the fear of making mistakes is the last thing on your mind when filling out export documents – and our digital platform can ensure that you never have to deal with the fear of making mistakes again.

Small coffee business receiveda large bill based on a typo en stor regning på baggrund af én enkelt tastefejl 

Rune Sandholt is the founder of the coffee company NGUVU. Rune’s company ensures better working conditions for female coffee farmers in Kenya and buys coffee beans directly from the women, which guarantees them a proper payment, as they would otherwise have to use a middleman, who often takes a large part of the cake himself.

NGUVU is Swahili for strength, and strength is exactly what the company brings to the Kenyan coffee farmers. NGUVU also facilitates (for the female farmers):

  • Professional teaching in agronomy so that the women can optimize the coffee farms
  • Coffee trees from the locally founded NGUVU nursery
  • Water tanks for watering the coffee trees during periods of drought
  • If the imported goods are stored until they are to be resold within the EU, duty and VAT must first be paid when the goods leave the customs warehouse​

When the coffee beans are to be sent from Kenya to Denmark, a number of customs documents must be attached, and these must be filled in correctly. It can be a convenient solution to delegate document management if you have not tried to fill them in yourself, but it can also go wrong.

Rune asked a freight forwarder to take care of the task regarding the customs documents, and everything ran smoothly until the coffee-loving entrepreneur received a letter from the Customs Agency in his e-box.

Nguvu 4

The coffee shipment had been detained at customs, and the NGUVU director received an additional customs bill of DKK 27,000 – all because a single number had been typed incorrectly in the shipment’s item code.

For Rune’s small, remunerative coffee business, 27,000 kroner is a huge amount, which caused all the alarm bells to ring, as the consequences of such a bill would be very large. It dawned on Rune that a mistake had been made, and that it could be his responsibility when it came to a document that he himself had not had in his hands.

Rune called the Danish Customs Agency, and after telling his story to an empathetic customs officer, he was able to have the penalty duty canceled and the coffee beans released. However, the result of the conversation must be categorized as a rarity, and it is by no means guaranteed that Rune will be able to overturn the next customs bill, should it come in the future.

Although it may seem heavy to have to handle the customs documents yourself, it is important to know that the responsibility for the documents being correct always lies with the company (exporter/importer) in the end.

Fortunately, there are digital solutions that make it easy to manage import and export processes, even if you have no previous experience with the subject.

It may also be a good idea to turn to a specialist who can advise on the filling in of import and export documents, so that mistakes are avoided. We have spoken to one of our good business partners, the consulting and auditing company BDO, about which errors typically occur, as well as what consequences they can have for the import and export companies.

BDO is one of Denmark’s largest consulting and auditing companies, which, among other things, specializes in auditing and accounting as well as consulting on VAT, customs and taxes.

They help a large number of industries and companies with advice and handling of the above topics.

BDO’s Department for Customs and International Trade helps export companies, among other things, to optimize customs processing so that risks are minimized and unforeseen customs bills are avoided.

You must be aware of this when filling out customs documents:

  • Check that the product description is filled in correctly
  • Package quantity and number must be specifically described
  • The weight of the shipment must be specified (some customers have specific requirements for the use of decimal points)
  • Check whether the recipient country has special requirements for the document completion
  • Always check whether sender/receiver information is filled in correctly

You can abdicate the workload – but never the responsibility

When a product is to be exported or imported, it requires that a number of documents be filled in – and that these be filled in correctly. Some companies do not want to fill out documents and certificates themselves, which is why they choose to look for alternative solutions. A nearby solution is to delegate the task to a freight forwarder.

It is not always the best solution, as there may be a risk that the freight forwarder will make a mistake in the documents, after which the responsibility lies with the exporting/importing company. Although it may be tempting to outsource the task, you, as a company, lose the overview and control over the process.

‘If just one single document is flawed, it is your company that has to live with the consequences, even if you are not the one who filled in the documents.

Why do the errors occur?

Klaus Kalsmose Jakobsen, head of Customs and International Trade at BDO, has been fully aware of the issue several times. When we ask him what errors BDO experiences in connection with import and export documents, he is quite clear on the matter:

>>

”There is often insufficient information in the product information. We sometimes experience that there are insufficient descriptions of the product and that there are errors in the amount of parcels” 
Klaus Kalsmose
BDO

If a freight forwarder or an employee of the company omits information in the product information, the company suffers the loss. It is therefore important to ensure that the documents contain the necessary and correct data.

However, the overall question still stands: Why do the errors occur when it is so important to fill in your import and export documents correctly? Klaus assisted us again with an answer that shed light on the problem:

>>

”It is a complicated area, and therefore it can very easily be due to a lack of information about the specific requirements. It also happens that some countries change their rules for specific certificates, which can make filling out difficult”
Klaus Kalsmose
BDO

Of course, not all employees and freight forwarders make mistakes. Most of the people involved in filling out the documents have in-depth knowledge of documents and the goods being exported – but that is why the errors still occur. Klaus also says that it is typically the small and medium-sized companies that experience mistakes being made in connection with document handling.

However, it is usually also these companies that cannot afford to receive an additional customs invoice in their e-Boks.

BDO’s customs expert determines the consequencesne

When you’re in the middle of the problem, it’s easy to be backward – and if you’d just kept track of your documents before the shipment was created, you could have saved yourself all the trouble.

Although Klaus Kalsmose Jakobsen acknowledges that he does not experience faulty certificates on a regular basis, he states that the consequences are great when the errors finally show up:

>>

”For export, the certificate cannot be stamped on departure, and the goods therefore do not enter the recipient country- which can subsequently result in fines from the Customs Authority. When importing, the errors can result in large fines and seized goods – and if the problem is not resolved, it can meanthat the shipment must be destroyed."
Klaus Kalsmose
BDO

For NGUVU, an unforeseen customs bill of DKK 27,000 was catastrophic, just as it will probably be for many other companies. If the shipment is also sent back, ends up in a quarantine warehouse, is confiscated or destroyed, it can have even greater financial consequences for the company and destroy the relationship with the customer.

Avoid errors in your import and export documents

If you want to avoid typos in your documents and certificates, it makes sense to look towards digitization. On the Contenera platform, the data entry can actually be completely automated using software robots, so you don’t have to enter everything manually.

Food certificates, certificates of origin, EUR.1, A.TR. and many other certificates can be completed on the platform, where you can also book transport, make customs declarations, create product catalogs and much more. It is possible to gather your entire export process on the platform, which increases the efficiency of the export department, saves time and money and minimizes the risk of errors.

You can also invite experts such as BDO onto the platform so that they can help you with e.g. to have the correct customs numbers entered into our online product catalogue. You can read more about the benefits and possibilities of digitizing your export processes

Feel free to booke a demo so you can see what our platform can do for you!

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