SAP solutions for customs and foreign trade

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International trade requires special processes: You need to collect and maintain receipts, correctly tariff and take customs laws into account. These special requirements can be mapped with the help of software solutions. With Global Trade Services (GTS), SAP has a solution in its program that was developed specifically for this purpose. Those who want to use less extensive systems can also use the functions included in the ERP system. In this article, we explain which different solutions are available, which functions are supported in each case and which solution is the right one for which requirement.

Customs clearance, origin of goods & preferences, intra-Community processes, tariff classification or trade compliance: the responsibilities of customs officers are wide-ranging. Preferential processing, for example, involves accurate document management that proves the origin of all components of the goods. This enables goods to be sold to customers outside the EU at reduced rates of duty.

Those who carry out this or other foreign trade processes without software assistance risk errors and thus legal and economic consequences. SAP has no less than three possible solutions to support these processes, the integrated functions of either SAP ECC or S/4HANA, or the standalone SAP GTS.

1. SAP ECC Foreign Trade

As the name suggests, Foreign Trade is the term for the foreign trade component within SAP ERP. These functions are integrated with Materials Management (MM) for imports and Sales and Distribution (SD) for exports. Document management for this area is also closely linked to the Financials component.

According to SAP, the following functions are included with Foreign Trade:

Use of all import and export processes and efficient integration into the logistics chain
Automatic verification of export licenses based on current regulations
Simplify reporting with automated procedures for creating, printing, and submitting reports
Identification of products for preference processing
Efficient handling of business processes through EDI communication
Foreign trade data can be called up in all relevant SAP components (before goods issue); even after posting the goods issue, data can still be changed in the invoice

Who benefits from foreign trade?

Basic functions for international goods traffic are included in the FT module. If you only need to map a few special processes, this variant will get you quite far. With the help of customizing or Z programs, the module can be individually adapted and is thus sufficient for many requirements.

Especially when international trade is not the focus of the business model, the Foreign Trade Module provides sufficient security for customs regulations.

The big problem arises from the end of maintenance for SAP ECC: SAP's support for the ERP solution ends in 2027 (or 2030 with extended maintenance). The majority of companies are planning to switch to S/4HANA. With the end of SAP ECC, however, Foreign Trade is also history.

2. SAP S/4HANA International Trade

SAP S/4HANA does not include Foreign Trade. However, the ERP successor also contains functions for processing international goods movements. These are grouped together under the term International Trade. Compared with the scope of functions in Foreign Trade, however, this is significantly smaller. Above all, support for preference processing, which was still included in Foreign Trade, is missing.

The following functions are available in International Trade:

Intrastat
Tariffing and classification
Legal control for purchase orders, orders and deliveries
Letter of credit (as part of the FI component)

Who benefits from International Trade?

As mentioned above, companies that have previously relied on Foreign Trade should definitely check whether the successor system really supports all the processes that are needed before switching to S/4HANA. Those who have previously managed without digitized foreign trade processes and now want to take the first steps in this direction under S/4HANA can take advantage of the functions of International Trade.

However, the rudimentary functions of the integrated module are only very marginally supported if import and export form an important part of the company. Especially the risk due to the missing preference processing will be a reason for many companies to look at alternative solutions.

3. SAP GTS

SAP GTS is a comprehensive system that offers a very complete range of functions for customs and foreign trade. The clear advantage is that the fully automated and digitized processing of export and import transactions creates significantly more transparency, legal security and profitability. SAP GTS is the only SAP solution that covers all aspects of secure customs and foreign trade processing.

The following functions belong to the SAP GTS modules:

Customs Management

Export
Import
Transit procedure
Pricing
Excise tax

Compliance management

Sanctions list check
Embargo check
Legal control
Classification

Risk management

Supplier declarations
Preference determination
Export refund
Letter of credit

Intra-EU Supplies

Intrastat

Which versions of SAP GTS are available?

The first version of SAP GTS was launched in 2002. The current version is number 11.0 and the maintenance period for this solution ends in 2025. In addition, the successor version, a special Global Trade Services edition for SAP HANA, has been available since 2020. As the name suggests, this is specifically geared to the HANA database. SAP GTS, edition for SAP HANA is fully compatible with both SAP ECC and SAP S/4HANA.

The difference between these versions is not so much the scope of functions. Only the topic of letters of credit is not included in the e/4HANA edition, as this is already available as an integrated function in International Trade of the S/4HANA system. Adapted from S/4, however, it offers other benefits, such as the use of Fiori apps or analytics functions.

For whom is SAP GTS suitable?

SAP GTS is a comprehensive system, which is accordingly worthwhile if users require this support on a large scale. The more your company is internationally positioned and has to move goods internationally, the more likely you are to benefit from investing in the SAP GTS license.

Especially when you look at the limited functions of International Trade, there are good reasons to rather rely on the comprehensive system. This concerns

Industries where preference processing is an important factor for your competitiveness
Companies that have special requirements for their compliance management
Companies that primarily engage in international trade outside the EU

Alternatives to SAP GTS

Companies that do not need the full range of GTS functions, or for whom these functions do not justify the investment in SAP GTS, nevertheless do not have to limit themselves to the narrow scope of International Trade. SAP enhancements can support the processes needed, while offering even more benefits:

Full integration in SAP, no media breaks
Quick and easy to integrate
Reduced risk of error
Legal certainty thanks to high transparency and end-to-end processes

The most obvious advantage is that you can usually select the processes and functions you need. This means that you only have to invest in add-ons that you actually need, instead of buying a fully comprehensive SAP license.

Whitepaper: Preferential processing in customs/foreign trade

Which processes are covered by SAP ERP and S/4HANA and which are not?

This white paper examines the challenges and opportunities of automating processes with SAP. Compared to manual activities, automation helps to minimize errors and implement many work steps much more efficiently. Companies that want to use an SAP-based solution but not GTS cannot avoid add-ons. When selecting them, you should make sure that the solution covers both worlds - SAP ERP and S/4HANA - equally well.