Discover the Financial Aspects of Trade Compliance with GRC Global Trade Services

  • by Rajen Iyer, Cofounder and CTO, Krypt, Inc.
  • September 15, 2008
Although SAP GRC Global Trade Services works very closely with logistics and interfaces with supply chain processes, it affects Financial Accounting in a number of ways as well. Learn how the functionality affects finance functionality and features directly and indirectly.
Key Concept

GRC Global Trade Services supports the production of international shipping documentation, including commercial invoices, entry summaries, and pre-clearance notifications. You use a pro forma document from ERP Central Component (ECC) created against the outbound delivery or sales order to generate the trade documents for customs declaration. It receives the details of the transaction from the back-end ECC or R/3 system (e.g., the material or sales price) to declare duty calculation to customs. As a standard practice, business users generate these invoices before the customer invoice because the customer has not received the goods.

GRC Global Trade Services receives its material valuation (i.e., standard cost) or the list price from the transaction created in R/3 or ECC. You can pass on a payment based on the duty calculation to GRC Global Trade Services as a condition value in the transaction. The system generates trade documents as messages in GRC Global Trade Services attached to the customs shipment document. The billing document (preferably a proforma billing document) from the feeder system triggers this customs shipping document.

While working on 15 SAP GRC Global Trade Services projects, I have encountered doubts, questions, and confusion from the Financial Accounting (FI) community about what GRC Global Trade Services can and can’t do. Some people mistakenly believe that it automatically solves many of their inter-company, drop-ship, and cross-company reporting issues.

I’ll explain how GRC Global Trade Services integrates with FI in three main components: Compliance Management, Customs Management, and Risk Management. I’ll start by going over some of the ways GRC Global Trade Services affects financial activities via communication and strategy. This article is intended for business analysts and project teams with companies who are implementing GRC Global Trade Services, or considering doing so.

Rajen Iyer

Rajen Iyer is the cofounder and CTO at Krypt, Inc. Rajen has written several in-depth, best practice articles, white papers, patents, and best-selling books on SAP Logistics and SAP Global Trade Services, including Effective SAP SD and Implementing SAP BusinessObjects Global Trade Services. He is also an invited speaker at industry conferences.

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