Logistics service provider Steinweg advances the import duties on behalf of the customer and invoices them only afterward. For a long time, freight forwarders had to manually prepare and send these invoices for each customs clearance. This not only took an enormous amount of time but also had a negative impact on working capital and was difficult to monitor. This Rotterdam-based specialist in warehousing and transshipment has fully automated this outbound invoice flow using 4CEE. Product owner Rene Schuring discusses the motivation behind the change, the results, and the collaboration with 4CEE. “Of course, we save a lot of time because no one in operations has to deal with manually creating invoices anymore. But the biggest benefit lies in the control we now have over this substantial cash flow.”
When goods enter the Netherlands from abroad, import duties almost always have to be paid. Steinweg, a logistics service provider that transports these goods across the border, handles this so-called customs clearance process as part of its service to the customer. This means they declare the products and materials to customs, receive the invoice for import duties from the Tax and Customs Administration, and pay it in advance. They then bill the customer for this amount afterward.
Every year, Steinweg sends out thousands of invoices for this purpose. For a long time, this was a manual process. Rene explains how it used to work: “We would receive the payment notice from the Tax Authority in PDF format. It listed, among other things, the type of product, the quantity being imported, and the applicable import duty rate. This document was printed out, the freight forwarder reviewed it, and then he or she entered the necessary information for the invoice. The invoice and accompanying attachment were then emailed to the customer.”
“I appreciated that we were able to have very open and honest discussions with 4CEE right from the start.”
A time-consuming, error-prone, and unchallenging task—with all the consequences that entailed for the organization. As a result, invoices were regularly sent out late, even though Steinweg had already advanced that money to the tax authorities. For example, people would wait until the total invoice was sent out to add the import duties to it. After all, that saved the employees time; they only had to send one invoice instead of two. But that wasn’t the intention. Rene: “Customs clearance is only a very small part of the services we provide to our clients. And of course, we don’t send that total invoice until we’re completely finished. That’s often much later than the customs clearance—and thus the moment when the import duties must be paid.”
Because there was often a long delay between the time Steinweg advanced the import duties and the time it received reimbursement from the customer, the company’s working capital was seriously impacted. This can amount to tens of millions of euros annually. That was a key reason for automating this outbound invoice flow in collaboration with 4CEE. “Now, the invoice for the import duties is automatically sent out two days after customs clearance,” says Rene. As a result, the company doesn’t have to wait as long to receive its money.”
Another important aspect of this story is control: that’s key. Given that such large amounts are involved, it’s especially important that no mistakes are made. Rene: “For some customers, we send a separate invoice for each customs clearance, but for many customers, we create a consolidated invoice for all clearances in a week. When these consolidated invoices were still entered manually, that was done only at the aggregate level. As a result, verifying each individual customs clearance was virtually impossible, which cost a great deal of time and money. Now, these consolidated invoices are also generated fully automatically. This is done based on each individual, underlying customs clearance. This allows us to see very precisely that every customs clearance is billed; we can be sure we’re not losing any money.”
“My colleagues in operations can now focus on meaningful work instead of spending hours retyping data.”
Another important benefit of automating this invoice flow is the time saved. “No one on the operations team has to deal with these invoices anymore. I was incredibly proud when, for the first time in our history, an invoice was sent without human intervention. Only at the very beginning of the process is the underlying customs declaration briefly checked by an employee before it’s sent to customs. That employee then has two days to intervene; after that, the automated process kicks in.”
Did the project ultimately deliver what Rene had expected? “Absolutely, practically one hundred percent,” he replies immediately. “To be honest, it was quite difficult at first to get the rest of the organization on board. Despite the compelling business case, some colleagues didn’t really see the added value at first. That’s changed now. Not only has everyone fully embraced the automation, but they also recognize its benefits. For example, the fact that we’re saving a lot of time because no one in operations has to manually create invoices anymore. They can now focus on meaningful work instead of spending hours retyping data. But the biggest benefit lies in the control we now have over our cash flow. With such substantial amounts involved, that’s worth its weight in gold.”
How does Rene look back on the project and the collaboration with 4CEE? “Very positively,” Rene says immediately. “I appreciated that we were able to brainstorm very openly and honestly from the start. What should the automated process look like? What’s possible? What isn’t? In doing so, 4CEE also honestly assessed the software’s limitations: where should we draw the line? We’re now live across the board, and the great thing is that what we had envisioned and designed beforehand ultimately worked out largely as planned. To me, that shows we thought everything through carefully.” He adds: “On this project, I worked particularly closely with Rob from 4CEE. In my opinion, he’s a top-notch consultant. Proactive, flexible, a proactive thinker, a hard worker, and on top of that, a fun and sociable guy. I really enjoy working with him.”