insights

The Importing Checklist for Small Business Owners in Canada & The USA

Moselle Research Team

Dec 2, 2020

No matter what stage you’re at with your small or medium sized business, there’s always something about importing that remains inefficient and time consuming.

Importing involves many steps and intensive attention to detail. The reality is that there aren’t enough accessible and affordable tech options out there for small business owners to track purchase orders and imports.

Since Moselle likes to help all our partners, and any small to medium sized business owners for that matter, we wanted to lay out the complete importing checklist so that you can refer to this whenever you need to to ensure you’re on track

Let’s get started.

Step 1: Get A Business Number

Before you even think about importing any goods from another country, your business needs an identification number created through the Canada Revenue Agency (CRA) in Canada or Business Number (BN) if you’re in the USA. Why do you need this? Well, this business number will tie you to a list of others that import and export. This is a number that’s free of charge, so you don’t need to be concerned about incurring costs!

You can either call the CRA directly to set this up, or visit the Business Registration Online option.

Step 2: Identify What You Want To Import

Now this may seem obvious, and that you should already know what you want to be importing from the beginning. This is true to an extent, but when it comes to owning a small business you’re constantly scaling and thinking of new products to sell to customers. So, no matter what stage you might be at it’s always good to quickly review what you’re looking to import and make a list according to your needs at that moment and months down the road.

This is also the stage that will save you a ton of time further down the line in your importing journey. You’ll want to gather detailed information about what you’re importing, for example:

An in-depth description about what you’re planning to import
What the product is made of
Any other information pertaining to the product in terms of how it’s made, what it is, the size, etc.

When you get to the mandatory step of finding HS/HTS codes for duties and tariffs, that’s when this information will be crucial and, by sourcing it all now, it saves you ample time down the line.

Step 3: Customs Broker: To Use One, Or Not To Use One

Now there’s no right answer here, but this is the point where you’re going to want to decide whether or not to use a customer broker.

What are customs brokers exactly? Their job is to ensure that your goods seamlessly get through customs and into your hands. Their job doesn’t end there though. More often, you’ll now see customs brokers help with the new development of product lines, new markets and can even help with evaluating how global changes can impact your business.

When it comes to deciding whether or not to work with a customs broker, it’s all about your comfort level. If you feel that you have the time, and that you want to understand the ins and outs of importing and the regulations with customs, then choosing to do it yourself may be the way to go. However, if you find you don’t have much time on your hands but you want to ensure you’re not missing anything with your purchase orders, HS/HTS Codes and more, it may be a good idea to look into a customs broker.

Step 4: Where will you import from? And, Can it Legally be Imported?

Chances are, you already have somewhat of an idea of where you’ll import from. If you haven’t thought too much about it you’re going to want to decide before even beginning to order anything. Think about which countries specialize in the goods you’re looking to import, potential shipping fees, or any other potential factors.

Understanding trade agreements at a high level between countries may help you to cut significant costs in duties and tariffs. For instance, when Canadians import French goods, there is little to no duties and tariffs. This helps keep the cost of imported goods low, and when those costs are low, you can pass on the savings to your customer and stay competitive.

Once you know where you would like to import your product from, you’ll want to make sure the goods are permitted in Canada. Some goods aren’t actually allowed to be imported and you’ll want to ensure that your goods from the country you’ve chosen can actually be imported without any issues and legally.

Step 5: Are Your Imports Subject to Permits, Restrictions or specific Regulations?

Countless imported goods are subject to various permits, restrictions and regulations when coming into Canada or the United States. Who’s responsible for managing this? It’s the CBSA (Canada Border Services Agency) or the United States Customs and Border Protection (CBA) that administer the requirements. Keep in mind that more than one governmental department may be involved in importing the goods you’re hoping to focus on so you’ll want to contact any department that could be involved with getting your products over the border.

You also will need to see if there’s provincial regulations outside of the federal ones on the products you’re importing. Oftentimes, especially with products like alcohol for example, provinces have different regulations controlled by separate governing boards.

Step 6: Determine if They’re Subject to Domestic Controls

Before starting to put in your purchase order, you’ll also want to see whether or not the products are subject to domestic controls. So, if you’re planning to import something that could potentially be controlled within Canada or the USA, you’ll want to register with the Controlled Goods Program with Public Works & Government Service.

How do you find out if it’s a controlled good within Canada? You can check this list.

Step 7: Choose An Exporting / Shipping Partner & Create A Purchase Order

The relationship you’ll have with your shopping and exporting partner is a special one. There’s got to be a lot of trust there because if one thing slips, it could mean a high cost for your business.

This can take a lot of research and conversations until you find “the one” but luckily there’s ways to speed up the process. With Moselle, for example, we help you maintain your supplier relationship to ensure it stays positive.

It may seem like a step that shouldn’t be so labour intensive, but this is a partnership that will ideally last for decades, so you’ll want to choose not only the right company that ships the goods you need imported -- but also the right person.

Step 8: Receive Your Bill of Lading

What exactly IS a Bill of Lading? Good question. Arguably, it’s actually one of the most important documents in your importing journey. Essentially, it’s a legal document for the carriage of your products being imported. More than that, it’s also the ONLY document that can actually prove goods were received by the right person.

This is just one reason why you need to be working with a shipping partner you trust -- because they develop your Bill of Lading. At the most basic level possible, a BOL (Bill of Lading) will cover:

Where the products are coming from
Where they’re going
The size, description and weight of the shipment
Who pays for shipping
The declared value

This is a legal document that always needs to be accurate and is used globally for importing shipments worldwide.

Step 9: HTS/HS Codes

We’ve all heard the words duties and tariffs, but how exactly do those get calculated? If you guessed HTS/HS Codes since we’re on that step -- you’re right!

Back in 1988, the WCO (World Customs Organization) created something called Harmonized Systems Code (or, HTS Codes), which are still used to this day as a standardized system for internationally traded products in order to classify different items.

At customs, those who work to clear your importing order use these codes to confirm the duty or tariff rates that will need to be paid. These codes need to be accurate and provide as much detail as possible, otherwise you could be looking at hefty extra costs.

Want to learn more about HTS/HS Codes and how to use them? Check out our guide.

Step 10: Gather All Required Documents

There’s a number of documents that you’ll want to have on file for each purchase order you’re placing while it’s on the way, and afterwards.

Some of these documents are:

Invoices which includes Commercial invoices
Certificates of Origin
Bill of Lading
Canada Customs Invoice
Permits
Cargo Control Document

Keep in mind, the list likely doesn’t end there for you as an importer. Depending on your product and the province you’re shipping to, there may be further documentation required.

It’s important to keep all of this in one spot and a great way to do this is online so everything is clean, and stored easily. You can soon do this with Moselle when you put in purchase orders so that everything is easily accessible, in one spot.

Step 11: Select your Shipping Method & Ensure Cross-Border Requirements are Met

You don’t want to forget about other borders your product might be stopping at on the way. Though what you’re importing will not be staying in these countries it's passing through, there are most likely requirements that you need to meet when your product’s hitting other borders.

Oftentimes, when you decide on a shipping method, you’ll know what you’ll need to look into and your partner may already know these requirements in advance. However, it’s good for you, as an importer, to know what those are as well.

Step 12: Tracking

Now that your purchase order is in and everything is organized, it’s time to track the progress of your import to ensure it is on time. Small and medium sized business owners often do this in spreadsheets, but quickly find when it comes time to scale, it’s difficult to sustain this method.

With Moselle, you’ll also soon be able to easily track shipments and know the status of all your purchase orders, allowing your business to plan ahead to scale faster and more seamlessly.

Step 13: Submit All Required CBSA or CBA Documents & Pay Duties and Taxes Owed

When your order arrives at the border, this is when your organization skills from earlier really come into play. This is when you’ll be submitting further paperwork and documents and where you’ll see if your budgeting was accurate (which is something we help you at Moselle with!). From here, your next step is to pay all duties and taxes owed before you receive your products!

Now, these 13 steps might sound overwhelming, but you can do it! And at Moselle, we’re here to help you every single step of the way. So, if you ever have questions about importing products, purchase orders and more, don’t hesitate to reach out! We’re here to help small to medium sized businesses streamline the importing process, so you can focus on higher business priorities.

Just starting your importing business? We’ve also got some helpful tips here.