Import cost savings or just paying later?
Compare the complete cost of the same goods separately from when cash leaves and returns to your business. Later payment improves liquidity; a saving needs a lower total after fees, storage and financing. Ask Cambridge China Bridge to show costs and payment dates separately.
Keep cost and cash timing separate
Start with a baseline order: the same specification, usable quantity, currency assumptions and delivery destination. List goods, freight, clearance, duty and delivery costs. Show recoverable VAT separately and include any irrecoverable portion in the cost comparison. Keep financing and extra storage visible as additions, rather than hiding them inside a claimed landed-cost saving.
Then build a dated cash schedule for deposits, balances, freight, tax payments, VAT recovery where applicable, and customer receipts. Continue until outstanding bills and recoveries are settled. A lower payment before delivery can still leave the final total unchanged or higher. Our import cost reduction guide covers the underlying cost levers.
Check what supplier credit actually costs
Request comparable cash-payment and credit quotations. Ask whether credit changes the goods price, removes an early-payment discount, adds finance charges or changes the payment currency. Record the event that starts the credit period and translate it into an expected payment date. Do not assume it starts when stock reaches your premises.
Show any borrowing interest avoided separately from the goods-cost difference. Use your actual funding terms and expected payment dates. If credit costs more but reduces the cash needed before customer receipts, record that trade-off explicitly. Test late customer payment as well as the planned case, using the working capital guide.
Compare warehouse routes through to exit
Customs warehousing suspends the duty payment point; it does not by itself remove duty on goods subsequently released into free circulation. Import VAT is due when goods leave the warehouse for free circulation. HMRC states that duty and VAT are not payable if the goods are re-exported. Separate expected domestic releases from re-exports when comparing routes.
Ask for entry, storage, handling, removal, declaration and onward transport charges. Compare these with the ordinary storage and delivery costs they replace, rather than treating every warehouse charge as additional. Model slower stock movement and the intended exit route. Use the customs warehouse guide for the operational detail.
Treat tax timing as its own benefit
A duty deferment account groups payments into a monthly Direct Debit rather than payments for individual consignments. Ask HMRC or your customs broker to confirm whether you can use postponed VAT accounting and how to declare and recover import VAT on your VAT return, subject to normal recovery rules. Neither arrangement, by itself, reduces the tax amount. See the import VAT guide for eligibility and instructions.
Keep recoverable VAT out of the net cost comparison, but include any actual payment and later recovery in the cash schedule. If using postponed accounting, show the VAT return treatment without inventing a border payment or cash refund. Ask your accountant to confirm the recoverable portion and relevant dates. Include any broker charges associated with the chosen payment arrangement.
Working out your own order? Send us the product on WhatsApp and we reply the same working day: WhatsApp us
Approve a comparison you can reconcile
Ask for a decision sheet showing the total goods and logistics cost, financing and storage adjustments, the dated cash schedule, and the largest cumulative cash shortfall before customer receipts. Label each benefit as a cost reduction, a financing saving or a timing improvement. Do not count released working capital as profit or add it to an interest saving.
Mark estimated dates and charges clearly. Test delayed sales, longer storage and credit falling due before customers pay. After the shipment, reconcile quotations with invoices, customs documents and bank movements. Cambridge China Bridge can help assemble supplier payment terms and shipment charges; confirm tax treatment with your accountant and customs agent before relying on the comparison. For a programme-wide review, see our sourcing programme savings guide.
Frequently asked questions
Does supplier credit reduce landed cost?
Only if the comparable total falls. Later payment alone improves timing. Check price changes, lost discounts and finance charges, then show any borrowing interest avoided separately.
Does a customs warehouse save import duty?
For goods later released into free circulation, warehousing delays duty rather than removing it. HMRC says re-exported goods do not incur duty or VAT. Compare warehouse and exit charges before claiming a net saving.
Is postponed import VAT accounting a saving?
It changes how import VAT is accounted for, rather than reducing the tax. Recovery remains subject to normal rules. Keep recoverable VAT separate from net costs and model any actual cash movements.
How do I compare cash and credit import quotes?
Use matching goods, quantities and delivery scope. Compare complete costs, then plot payments and customer receipts by date. Include storage and financing, and test whether credit falls due before customers pay.