Tilde Publishing and Distribution ISBN: Import/Export Mapping International Trade for Australian Business Import/Export Costing

Generally, there are two different points (and two different reasons) for costings: – Pre-shipment – estimating what the costs will be – Post-shipment – calculating actual costs

Import/Export Costing Some of the costs that are specific to international trade are costs associated with: – international transport; – international cargo insurance; – import duty; – customs clearance; – quarantine clearance; – permits and licences; – currency conversion; – foreign currency payments; – international marketing; – international travel; and – international trade advice and assistance

Import/Export Costing In order to capture costs as accurately as possible, it is useful to cost on a shipment- by-shipment basis. There are two main methods of apportioning the costs across the individual items in a shipment: – Valuation method – Weight/volume method

Import/Export Costing Computer software such as spreadsheet programs are effective means of calculating costs. Advantages of using computer spreadsheets include: – elimination or reduction of calculation errors; – less time-consuming; – formulas allow fast re-calculation when details change, making comparisons or evaluating different scenario – using templates reduces duplication of processes for subsequent costings; – landed cost files can easily be stored, retrieved and transmitted electronically; and – reports can be easily generated.

Import/Export Costing There are several advantages of keeping records of pre-shipment cost calculations: – A comparison can be made with the pre-shipment costing and the post-shipment costing to assist in fine tuning estimates and improving their accuracy in the future. – A record is kept of the financial justification for proceeding or not proceeding with a particular international business transaction. – A record is kept of the financial justification for setting a particular selling price. – Time-consuming duplication and complete re-costing can be reduced when estimating costs for goods that may have been estimated in the past.

Import/Export Costing There are many reasons why records of actual costs should be maintained: – They may be required for tax and/or customs audit purposes. – They are used in order to set realistic commercially viable selling prices. – It enables you to identify cost reduction opportunities. – It enables monitoring of costs and any necessary action to be taken, i.e. adjust selling prices, change suppliers, hedge currency, etc. – They are required to determine overall performance of the business. – They are required for taxation purposes. – A comparison can be made with the pre-shipment costing and the post-shipment costing to assist in fine tuning estimates and improving their accuracy in the future. – The ongoing viability of the business is dependent on knowledge of what your costs are.