AEO – cost vs benefit myths debunked

AEO has been around since 2006 but there are still many companies in the UK that have chosen to not yet become AEO accredited. Despite the long list of benefits attributed to AEO, many businesses still feel that gaining AEO status isn’t worth the cost it may incur. Here we will look at some of the myths of the cost of AEO and show that, in fact, they are greatly exaggerated and false.

ContainersThere are no real benefits to AEO

There are still companies in the UK who believe that the AEO accreditation has little to no tangible benefits to their business. However, the benefits of AEO are large and varied. HMRC will deem AEO holders as low risk importers; therefore there will be a massively reduced risk of delays, hold-ups and document and physical checks. AEO is also recognised throughout the EU and the rest of the world so by gaining the accreditation your business will minimise any delays on an international scale.

Holding an AEO accreditation shows that your business is a trusted operator as you will be Customs accredited. This can be hugely beneficial when your company is attempting to gain new customers. If your business is trying to increase its global customer base, then having AEO status can be particularly beneficial. There are an increasing amount of companies across the EU and America who will now refuse to do business with companies who are not AEO accredited or in the processes of becoming so. By not gaining AEO, your business may lose existing or potential new clients.

The cost of gaining AEO outweigh the benefits

Many companies asked why they do not yet have AEO status say that the cost of gaining the accreditation is too great compared to the benefits they will receive. However, if you turn this question on its head and get companies to look at the cost of not having AEO, then they may see things slightly differently.

While there is a cost involved in gaining AEO status, including the time it takes to get all the necessary paperwork in order, and additional assistance from consultancies like ours, the costs of not having AEO are due to increase. In May 2016, a major overhaul of EU customs law is due to be fully implemented. One of the key changes is that all custom duties that are potentially due through the operation of a customs-authorised duty relief scheme or suspension regime must be secured by a guarantee. This will apply to around 20,000 customs authorisations in the UK.

The new requirement for payment of guarantees will bring about significant costs for UK businesses. Banks may provide these guarantees but they may want security in the form of a cash deposit. They may even reduce their lending facility in order to provide the guarantee. In addition to this, banks are becoming more reluctant to provide guarantees in this economic climate so their charges are expected to increase as well as the expected introduction of customs-related risk assessments.

Companies who have AEO status, on the other hand, will be granted a guarantee waiver as they are already deemed Customs accredited.

So the question really is can your business afford not to be AEO accredited? If you’d like to know more about how Synergos can help you gain AEO status and improve your business efficiency at the same time, then why not give us a call on 01484 817444 or email info@synergosconsultancy.co.uk ?

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Jenny Kilburn
Jenny Kilburn
Completed my Masters in Business Administration (MBA) in 2012 I was looking to start my own business. With over 10 years improving and streamlining business systems, I grasped an opportunity to assist a local business to improve their quality and communication processes by researching the requirements of a quality management system based upon ISO 9001 and conducted my first internal audit that resulted in 97 improvement recommendations. After a successful outcome, I was recommended again and again with glowing reviews and in February 2014, Synergos Consultancy was born. I now have the role of regularly reviewing and planning the strategic direction of the business to ensure that Synergos continues to develop, whilst at the same time, still actively working closely with some of our clients. In my spare time I love to attend the theatre to watch musicals, dance productions and plays. In 2019, I attended the theatre a whopping 24 times. I follow a plant-based diet which I absolutely love. A keen tick-tock follower, I have picked up a lot of interesting recipes. A firm favourite is Brussel sprouts and sriracha sauce baked in the oven. Delicious!
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