Supply Chain Resolution: Exposing Solutions for Increasing Business Cash Flow


Come the end of January, most New Year’s resolutions are by the wayside along with the Christmas decorations and leftover treats.

However if your resolution was to increase the profitability of your business this year, then don’t despair!

This blog will reveal the solution for getting your resolution back on track and ensuring the best chance of your business cash flow flourishing in 2017.


Evaluate your storage solutions

Whilst many companies experience an increased demand for their products in the build up to Christmas and over the festive period, the January lull can lead to an expanse of warehouse space laying empty due to the end of frenzied present purchasing. By sourcing the services of a 3PL, you can capitalise on meeting peak demand periods through upscaling your operations during busy periods, whilst offsetting costs during quieter times. Utilising space owned by a 3PL means you will only pay for the storage space and associated costs such as staffing, as per your business requirements.


Does the 3PL offer customs bonded warehousing?

When choosing a 3PL, consider a customs bonded warehouse to ensure maximum potential in increasing the level of cash flow within your business. Through storing your goods in a customs bonded warehouse no payment of VAT of duty is necessary until goods are sold. For any goods that are re-exported outside of the EU no payment of duties will be applicable at all!

Asides from Common Agricultural Policy (CAP) goods, there is no time limit on how long goods can be stored in a customs bonded warehouse. This can prove to be advantageous in instances of particularly favourable exchange rates when purchasing stock. The ability to capitalise on the import of goods during lower demand seasons and storing them in a customs bonded warehouse may also work out to be more cost effective than importing goods during peak periods when costs per unit rise in the purchase of products from the manufacturer and freight rates can escalate. If the cost of storage is offset by the savings made on the price of goods, forward planning in this manner can help result in higher profit margins for your business.


Can your import representative provide CFSP?

Asides from utilising a customs bonded warehouse, there are a wealth of other customs procedures that can help to keep cash within your organisation for longer. By finding an import representative that is able to offer Customs Freight Simplified Procedures (CFSP) you can take advantage of a simplified declaration procedure for faster clearance of your goods at EU borders. The streamlined, paperless process for the clearance of goods also means that you are able to save on administrative costs.

Not managed to sell your goods as fast as you perhaps hoped? Under CFSP VAT and duty are not payable against individual units until the end of each month after the produce has been sold meaning more money is available within your supply chain for longer than if you were to operate without CFSP.

Whilst there are significant benefits for undertaking business utilising simplified procedures, changes to the Union Customs Code in May of 2016 has resulted in an increase in financial requirements for non AEO accredited businesses wishing to take advantage of these. Hefty financial guarantees are required by businesses offering CSFP who are not AEO accredited for actual and potential customs duties applicable when utilising procedures such as inward processing, outward processing, free zone, temporary admission and customs warehousing. However, instructing a company such as Velta, who hold AEO status enables you to utilise customs simplified procedures without your business having to become AEO accredited itself.


By adopting any of the steps covered you will reap benefits from retaining money within your organisation. Whether you wish to utilise the additional capital in your business to replenish stock levels, furthering sales, to run additional advertising to increase awareness of business or hire staff to cope with demand and sales, we have the elements to help you achieve growth.

Through extensive levels of experience, Velta are able to offer comprehensive supply chain solutions for you and will conduct a free supply chain audit of your business to ascertain the best fit for your company. So if you want to really make this a profitable year for your business, please give us a call – Let’s grow together in 2017!


Related Blogs:

Why choose a Customs bonded warehouse?

Third party fulfilment solutions adding value to warehousing


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