At BlueBlox, we’re often asked to assist clients with the implementation of Importer of Record (IoR) business models. Usually, clients know what they want to accomplish with this model – that is, they need someone to import goods into a local market on their behalf – but they’re not always completely sure how to go about it. Does this sound familiar?
If it does, here’s our five-step process for implementing an IoR model for the first time:
Step 1: Look at your business model.
Is it a warranty business model? An offshore model?
Is it a drop shipment?
Are you shipping products that you don’t intend to sell, but that you will use to support your business in the local market – like a data centre?
Know what you’re trying to accomplish before you do anything else.
Step 2: Look at your products.
What products are you shipping and is your compliance correct, accurate, and in order?
Remember: Even though someone else is importing products on your behalf, you are still responsible for product compliance.
Step 3: Get your shipping documents in order.
Although IoR shipping documents are similar to normal shipping documents, there are slight differences that you need to be aware of – and these differ across countries.
Some examples include:
– The structuring of the invoice, with possible additional wording
– Adjustments to the Air Waybill or Bill of Lading
– Adjustments to operational processes
– The reviewing of forms relating to bank transactions
It’s crucial that your shipping documents are structured correctly and that you’ve covered all of the necessary inclusions.
Step 4: Implement the right processes.
Many logistics organisations – especially couriers and express logistics providers – don’t have the IoR business model part of their standard clearance processes. This means that you might need to explain the model to them, to ensure that nothing is lost or misinterpreted in the process.
When implementing your IoR model, ensure that your logistics channel and everyone involved in the operational flow clearly understands the model and the documents required.
Step 5: Appoint an Importer of Record.
Your IoR must understand your business model, why you’re importing the goods, and what the entire process involves. They should understand financial transactions, be able to provide clarification when there is no financial transaction involved, and be prepared with the right declarations. Importantly, they must also have authorisation to act on your behalf.
Once you have your business model ready, your process defined, your documents in order, your product compliance in place, and an appointed IoR, you’ll be ready to implement your IoR business model.
And If you need further guidance implementing your IoR model, please contact BlueBlox.