How a 3PL Can Help With Your Apparel Business Cash Flow

As April 18 looms, more American businesses are turning their attention to taxes and cash flow. Whether you're stressed about the impending deadline or wondering how you can get a leg up on next year's tax season, you may wonder whether using a third-party logistics (3PL) provider could help your business.

Partnering With a 3PL Provider Reduces Your Tax Pressure

As a partner in your business, your 3PL provider can help to alleviate your tax burden. You are only responsible for reporting activity you directly oversee. With less to do at tax time, it's much easier for your firm to stay organized.

Many reputable 3PLs even offer accounting services like cost management analysis, allowing you to spend less time on the figures. Even if you elect to perform your own analysis, you'll find this task easier with 3PLs offering a fixed cost per unit. That's why firms using 3PL providers typically find it easier to file their tax returns accurately and on time.

3PL businesses must have a comprehensive understanding of all taxes and regulations in the industry in which they operate. That's why it makes sense to use a 3PL provider specializing in your industry; fashion brands can feel confident that a provider like The Apparel Logistics Group knows all the requirements for fashion retail, including tricky areas like whether employees involved in shipping goods should receive W-2 or 1099 classification.

3PL Providers Reduce Complexity and Costs of Payroll Taxes

When you have your own warehouse, you'll typically need to pay staff to operate it. Obviously, you'll need to spend money on wages and other benefits like health insurance, but payroll taxes are a hidden cost that's easy to overlook.

You can avoid the ongoing expense and headache of dealing with payroll tax for warehouse employees if you hire a 3PL provider to store and ship your apparel items. When you engage a 3PL provider, these payroll costs, including taxes, become the third party's responsibility. If you're a sole trader, using a 3PL provider can help alleviate the need to worry about payroll taxes altogether. No matter what type of company you have, you will see your payroll tax bill reduced, your returns simplified, and cash flow improved.

Using a 3PL Provider With Foreign Trade Zones Cuts Inventory Property Tax

Some 3PL providers, including The Apparel Logistics Group, use foreign trade zones , known internationally as free-trade zones. These secure areas located in or near U.S. Ports of Entry lie outside of Customs and Border Protections territories. Customers that use foreign trade zones through 3PL providers can defer, lessen, or eliminate their customs duties. Since taxes aren't payable until the goods are moved from the foreign trade zone, using them can improve cash flow in the short term.

Businesses that make use of foreign trade zones may not need to pay inventory property tax, sometimes called ad valorem tax, so they typically see their overall tax burden reduced. They also aren't taxed on goods that are imported, yet exported again later. And they aren't slugged with taxes on imports of damaged or otherwise unusable goods or parts.

A 3PL provider can help your business operate more efficiently and effectively in a variety of ways, including increasing cash flow. To learn more, contact The Apparel Logistics Group for a free consultation.

Posted: 3/29/2017 12:17:24 PM by Global Administrator | with 0 comments

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