Personal Business: Exporting
SOFTWARE TO CARRY YOU THROUGH THE EXPORT THICKET
When it comes to red tape, the tangled process of exporting wins a blue ribbon. Shipping goods overseas requires filling out so many forms, complying with so many regulations, and dealing with so many people who may not speak your language that thousands of small companies throw up their hands--and stick solely with U.S. customers. "A lot of companies have avoided exporting because they think it's too much hassle," says Robert Windsor, executive director of the National Committee on International Trade Documentation (NCITD), an Alexandria (Va.) group that helps people get through the export maze.
Despite the headaches, it is possible for neophytes to figure out the complexities of exporting. The best route is computer software that automatically generates forms, assures compliance with regulations, and keeps tabs on overseas customers.
SMALL PACKAGES. The effort is usually worth it. Small manufacturers find that exporting may be the quickest and surest way to double their sales. And even though the value of some $580 billion of U.S. goods sold overseas each year is dominated by big-ticket items from companies such as Boeing and General Electric, smaller shipments are actually more prevalent. In 1991, 52% of all export transactions were valued at under $10,000, according to the U.S. Census Bureau, one of the many parties to which exporters must send documents.
Since even small shipments require a fixed amount of paperwork, it doesn't pay to do it if you're not efficient. "And the only tool you can use to do that is software," says Leslie Stroh, publisher of The Exporter, a New York-based trade journal. Some two dozen companies sell export-automation software. Among them are Syntra in New York; Export Software International in Reston, Va.; and Chicago-based International Software Marketing.
The NCITD, also known as the International Trade Facilitation Council, is a good source of information on the different packages available (703 519-0661). From May 26 to 28, the group will hold a Washington-area expo at which most of the software will be demonstrated.
The programs start at $5,000 and run on IBM-compatible PCs. Larger exporters may want to spring for systems that cost upwards of $250,000 and run on IBM AS/400 minicomputers. That may sound like a lot of money, but such highly specialized programs would cost much more to create from scratch. Since every type of export transaction is different, Stroh suggests that companies first assess their needs by getting in touch with the parties that require documentation. Most exporters deal with what's known as a freight forwarder--a company that facilitates the transaction and helps you make a connection with export brokers in foreign lands. Freight forwarders are listed in the yellow pages. Your local port authority and chamber of commerce can help you select a good one.
Most programs help you create the many different documents you'll need to complete an export transaction. Among them are commercial invoices, country-of-origin certificates, packing slips in different languages, correspondence with government agencies, and export-declaration forms. Without the software, you'd be forced to type out all these documents individually.
exact match. That can be tedious work because of the level of detail required. For instance, when a customer in India wants to import your goods, you generally have to receive a letter of credit from that customer's bank. "If your documents don't match the letter of credit exactly, you may not get paid," says Pano Anthos, president of Syntra. Starting at $10,000, Syntra's X-TRA program for IBM-compatible PCs has word-processing and data-base features that allow you to quickly insert into your invoices the appropriate legal clauses and financial information that are required by all kinds of foreign banks.
These programs can also help exporters comply with numerous domestic and international regulations. Failure to comply with any one of them could result in hefty fines and bad publicity. Among the stickiest are restrictions called table-of-denial screenings. The U.S. government keeps extensive lists of which countries are embargoed from receiving certain products. For instance, "you can't ship helicopter parts to Iraq," says Henry Ulrich, chairman of H.B. Ulrich & Associates, a Melville (N.Y.) supplier of export software for AS/400 computers. His program presents the tables of restrictions for sensitive products such as chemicals and high-tech components.
While most exports are loaded onto ocean liners, some are sent via air freight. It generally costs more, but it's quicker. Federal Express, United Parcel Service, and DHL all provide assistance to exporters looking to automate--in some cases, free of charge. If you make at least five shipments per day, Federal Express (901 369-3600) will even provide you with a free hardware and software system called PowerShip.
The cutting edge in export software involves technology known as electronic data interchange (EDI). Instead of mailing your computer-generated forms to freight forwarders, customers, banks, and government agencies, there are now numerous ways to send documents electronically, provided you have a modem.
CUSTOMS PLAN. But be careful. Each country and industry tends to have its own EDI standards. So you'll need different electronic forms to send clothing than you will to ship computer parts. The U.S. Customs Service intends to smooth out some of these incompatibilities. It is currently testing an extensive electronic scheme called the Automated Export System. Most export-software companies can provide the programs to get you started with this technology.
Since this type of software is not sold in stores, you'll have to get in touch with the companies directly to arrange a demonstration. You'll notice that the programs don't have the pretty graphics and windows of most popular business software. But export-automation programs have become much easier to use in the past few years.
Still, New York market researcher Trade Data Reports says that only about 22% of manufacturers with 20 to 100 employees export their wares. If your company is among the other 78%, buying software to set up a smooth-running export system could be one of the best investments you can make.Evan Schwartz Edited by Amy Dunkin