Customs and Border Protection has evolved in the way they accept payments from importers for duties. From requiring checks to be presented attached to entries within ten working days of the date of release, CBP migrated to allowing electronic payments on an entry by entry basis.
Today, CBP not only takes those payments electronically, but they also allow importers to aggregate a month’s worth of entries on a single statement and pay them – just like a credit card.
At Coppersmith, we recommend strongly that importers use ACH as well as Periodic Monthly Statement as vehicles to create a direct relationship with Customs for payment – it doesn’t change how we work with them as their customs broker – only the route the duties take to be deposited.
We advocate for use of ACH and PMS for three distinct reasons.
Electronic payments are more secure.
Given the prevalence of check fraud if someone can intercept a paper check, creating a direct ACH account with Customs has additional levels of security tied to an importer’s IR number and bank account directly that prevent nearly all opportunities for a fraudulent transaction to take place.
Electronic payments simplify accounting and record keeping.
We have heard from our accounting department as well as our importers’ accounting departments about how much simpler and quicker monitoring electronic payments is for them. Daily monitoring of cash flow and transactions allows them to ensure that the transactions are received and paid on a timely basis, avoiding the pitfalls and penalties that are associated with late payments.
Periodic Monthly Statement is faster, easier to reconcile and offers float for cash flow.
Can you imagine either writing checks or initiating payment transfers for each and every item on your credit card statement? If you’re doing multiple transactions per day or week – how tedious would that get? With Periodic Monthly Statement, you not only get to aggregate a month’s worth of entries, you get to also pay them the next month as well. What importer wouldn’t like as long as 45+ days to pay Customs?
Coppersmith can help importers set up both ACH and PMS with Customs with just a few simple forms. Coppersmith President Jeff Coppersmith explains it in greater detail below, but contact us for more information or to sign up.