- Posted by admin
- On June 29, 2018
- 0 Comments
This is a rather hot topic right now with the tariff war that is going on. I have been talking to a few of my clients about how they are going to handle the tariff on steel being imported into Canada. As I promised, I am sharing.
Here are a few excerpts:
- “The plan is to use Purchase Burdens on steel parts imported from the US into Canada. We have assigned the accrued tariff GL account into GL Interface table: applied burden account. We reviewed our Shop Resource applied accounts first to ensure that we weren’t going to have a problem. Had to do a few updates there. When we get our monthly tariff bills, we will post to the accrued tariff account. Then we will monitor to ensure we aren’t over or under accruing. Passing this cost along to our customer is still to be determined”
- “I am considering using an Issue Burden. I wanted to keep it separate from our current Purchase Burden that is for freight. I don’t know if that really matters either. In doing the testing realized that the issue burden is calculated on material cost plus the purchase burden so I have reduced the purchase burden accordingly.”
- “So far it sounds like it won’t be as big an issue as I first thought. There are only a handful of parts that we will continue to bring in from the US and that is mainly stuff we cannot get in Canada. The plan was to add the purchase burden to that select list of parts. I did tell our purchasing people that once we do that they will have to let us know if they are ever going to change to buy these parts in Canada.”
- “We have sourced our steel purchases from other countries than the US. We don’t have any changes to make in Visual other than setting up some new vendor pricing.”
I did a little “playing” in Visual as well. Worked with the Duty charge which set up the amount as an expense. The cost needs to be included in the cost of the part, so this wasn’t a viable option. But I did like how it did the math.
I have pondered, the use of purchase burdens as well. The solution will work IF the part is always sourced from US. If the parts can be sourced from many countries, then there is the potential of accruing purchase burdens when there shouldn’t be any. Hmmm. Maybe INFOR could add some logic to also look at the vendor to see if they should be subject to a tariff or not.