Many organisations could benefit from deferring payment of taxes to as close to the point-of-sale as possible by using bonded warehouses. These are approved by HM Customs and Excise (C&E) for the suspension of tax. Right across the scale of consumer goods, be it Christmas decorations or wines and tobacco, their operations are relatively complex when it comes to paying duty to HM C&E. To improve cash flow, such organisations need to be able to defer payment of the relevant taxes to as close to the point of sale as is possible.
The degree to which bonded warehouses are automated varies from relatively sophisticated to fully manual - depending on the size of the operation and amount of goods that pass in and out their doors.
Manufacturing and Logistics IT spoke to Martin Foster, product manager at RedPrairie, a company that has more than 10 years experience of helping its customers deal with C&E issues. Foster himself has been with the company, originally known originally as Online Duty Management Ltd, for 14 years and has extensive knowledge in this area.
Foster says there is a large administration burden on operators as businesses act as tax collectors for the government and record keeping is imperative for accurate auditing. Moreover, many companies use manual systems and, even if they choose to utilise HM C&Es systems, they key in data by hand. The paper mountains and electronic submissions are burdensome. Installing the correct system can alleviate these burdens.
RedPrairies DLx DutyMaster overcomes these problems and enables much smoother operations. This is a specially developed solution that makes life easier for operators and complies with HM C&E rules. This compliancy is imperative. Foster and his colleagues meet regularly with HM C&Es computer audit unit in formal monthly meetings, as well as frequent communications week-in-week-out, to ensure the product meets HM C&Es directives.
Its a one-size-fits-all solution, says Foster as he explains that due to its modularity, users are able to customise the solution to their needs. DLx DutyMaster can integrate with any customers system or if necessary can serve as a fully integrated module of DLx Dispatcher, the firms leading warehouse management system (WMS).
So how does it work?
The RedPrairie solution can run a bonded warehouse in its entirety by offering full warehouse management functionality. This means users can use radio data terminals, bar code scanning, variable automatic/manual putaway options, user definable picking rules and so on. Martin Foster, product manager, RedPrairie.
The built-in audit facilities within DLx DutyMaster make it easy for users to satisfy HM C&Es requirement for accurate stock reporting and duty documentation. Every change to sensitive data is timestamped and is numbered sequentially and the operator making the changes is also identified, which enables an audit trail and the opportunity for making before and after comparisons in the master file audit
log.Users can also be assured that independent rotation and movement historiesare maintained automatically, which further enhances traceability.
DLx DutyMaster at work
Foster claims users are right across the spectrum of the solutions application. For example, one of the big four grocery retailers has integrated DLx DutyMaster into itsexisting supply chain system andis extremely pleased with how easy it is to use for HM C&E requirements. Another customer, one of the largest shipping companies in the world, has the solution running its complete warehousing operation.
A third customer is currently reviewing integrating DLx DutyMaster with DLx Dispatcher as a completely seamless solution to give real-time data throughput.