Import and Export Trade Accounting

Importers and exporters carry costs that do not behave like ordinary expenses. Duties, freight and customs charges generally belong in the cost of the goods rather than in overhead, and getting that wrong distorts margin on every unit. Add foreign currency movement and payments to overseas suppliers and the reporting widens further. We keep landed cost accurate and the international reporting complete.

The difficulty is timing. The customs broker invoices weeks after the container clears, freight settles on its own schedule, and by then the goods may already be sold. A shipment costed only at year end leaves every interim margin report wrong in the meantime. We attach duty, freight, brokerage, and insurance to the shipment they belong to as the documents arrive, so cost of goods sold means something mid-year, not only after the books close.

Then there is the cross-border reporting, which is where the surprises live. A U.S. company at least a quarter owned by one foreign person, and a U.S. LLC owned entirely from abroad, generally files Form 5472 and has to show its transactions with the related party. Where the U.S. entity is that single-member LLC, the reporting reaches even money the owner simply wired in. Payments to foreign agents and service providers raise documentation and withholding questions before the money moves, while payments for the goods themselves usually do not. Foreign taxes paid may support a credit, on Form 1118 for a corporation or Form 1116 for an individual owner, and accounts held abroad may reach FBAR.