5 Common B2B Trade Compliance Mistakes (and How to Avoid Them)

Trade compliance has a critical role in B2B trade for both sellers and buyers in order for their business to operate smoothly. From time to time, there can be mistakes we make and think that they're not a big deal; however, it is important to acknowledge the mistakes and their consequences at the right time so that we can prevent bigger problems.

Poor record-keeping, misclassification of goods, and many uncorrected actions can cause your B2B business to face discrepancies in your import and export deals and lose trust, contracts, and profits. Below, we state five common B2B trade compliance mistakes and how to avoid them for your business.

1. Mistake: Failing to Classify Goods Correctly
Incorrect classification of goods can cause disastrous consequences for your B2B business, and any mistake regarding the special trade program can have irreversible damage and cause your business to lose validity and reliability. 

Solution: Classify the goods by following the Harmonized Tariff Schedule (HTS) and hire or train experts to review and update classifications regularly. Make sure the right product classification is applied to avoid overpayment or underpayment of duties and taxes.

2. Mistake: Not Maintaining Proper Records 
Organization and planning are the keys to maintaining continuous transactions for a successful B2B company. However, insufficient record-keeping can hinder your business's growth and cause potential problems during investigations or audits. 

Solution: Keep all your records by implementing a well-established record-keeping system and make sure the records are accessible and regularly backed up. Train your team about the significance of accurate record-keeping and store all documents of transactions and any other record related to your trades. 

3. Mistake: Not Obtaining the Necessary Licenses and Permits
Incomplete or missing licenses and permits can lead to severe unwanted scenarios in a B2B trade. Lack of awareness about export and import controls, sanctions, and any other legal procedures can result in serious penalties that can stop your business completely, whether the mistake is done unintendedly or not. 

Solution: Train your team with a robust training program to make sure everyone is aware of the import and export regulations to ensure compliance in your B2B trade. Design systems to be used by your staff to track any potential violation against the regulations and keep the permissions and licenses up to date.

4. Mistake: Inaccurately Completing Trade Documentation
Paperwork is highly important for the successful flow of your B2B trade. Hence, inaccurate completion of any documentation poses a high risk for your customs clearance.
 
Solution: Implement software systems and hire team members to be in charge of documentation processes. Keep up to date about the new or changed requirements for B2B trade and inform your team with the latest information.

5. Mistake: Not Having a Trade Compliance Program
Lack of awareness of trade compliance will eventually cause disappointing results for your B2B company, such as trade penalties or transaction delays.

Solution: Include a trade compliance program for your staff to minimize customs-related risks threatening your business. A thorough understanding of adherence to export and import regulations, documentation requirements, and trade agreements will keep your business alive and updated. 

In conclusion, a proficient understanding of trade compliance strategies is of great importance to lead to excellent results for your B2B company. Avoiding these common mistakes will take your business a few steps away from success.