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Trond
Product and Topic Expert
Product and Topic Expert
2,994
Preference Processing in SAP GTS supports exporters in fulfilling all legal requirements for customs preferences and identifying their goods as eligible for preferential treatment. Based on documented eligibility for preferential treatment, the exporter's customers can import these goods duty-free or at a reduced import duty rate, giving the exporter a competitive advantage.

Trade Preference Management helps you:

  • Request and manage supplier declarations

  • Calculate Product Origin and Preference Eligibility

  • Generate Long-Term Supplier Declarations for Customers


Duties & Fees – Significant Savings


Companies utilizing preferential origin can achieve 5-10% reductions in duties, potentially even more.*

With system support, you can increase duty savings by expanding the utilization of free trade agreements beyond what is practically feasible without an integrated and digitalized solution.

If identical products are sourced with multiple origins, you can increase eligibility rates by calculating preferential origin on product identifiers, like batch or serial numbers**.

Risk and Liabilities – Reduced Risk


You can avoid the risk of non-compliance due to preference calculations with inconsistent or outdated information maintained in excel instead of being actively overlooked by SAP GTS.

This will, in turn, reduce the risk of you providing outdated declarations.

SAP GTS integrated with SAP S/4HANA, or SAP ERP, helps you avoid non-preferential situations through integration with Sales and Distribution, for instance, due to unintentional discounting or a change in preferential eligibility threshold values, either by a change in rules or by a change in raw material cost or bill of material.

Operational Cost – Reduced Effort


You should also expect a reduction in labour costs through automation and eliminating manual and time-consuming tasks.

Our customers also experience increased response rates from Suppliers through the automated dunning process.

Improved Competitive Advantage


 

Trade Preference Management will increase your ability to compete in the market due to cost savings and improved visibility of current preferential eligibility thresholds.


Example of customer cost when eligibility is met.


 



SAP Global Trade Services, edition for SAP HANA


 

  1. Identifies requirement for Long-Term Supplier Declarations, create supplier requests, ensure proper follow-up and management of incoming LTSDs

  2. Determines preferential origin through aggregation and calculation based on updated free trade agreements, product costing and bill of materials.

  3. Automatically generates and manages declarations for customers receiving your products.

  4. Issues and reissues declarations in the event of a change in preferential eligibility.

  5. Integrates with sales and distribution processing in the SAP ERP application and customs management in SAP GTS.


 


Benefits of Trade Preference Management


 

 

See here for more details: https://help.sap.com/docs/SAP_GLOBAL_TRADE_SERVICES_EDITION_HANA/09fe61fcf7614503802bd2e775ba9e99/fc...

*Depends on industry and geography, see also: https://thetradecouncil.dk/en/services/export/free-trade-agreements

** with SAP GTS, edition for SAP HANA 2023