International sourcing means purchasing from a supplier located in another country. The transaction normally adds customs, international transport, currency conversion and cross-border payment requirements to the ordinary sourcing process.
How should a business apply International Sourcing?
Define who will export, import, arrange freight, clear customs and carry risk at each point. The contract, purchase order and Incoterm should describe the same operating arrangement.
What records support International Sourcing?
Verify the supplier, country of origin, product classification, required permits, payment instructions and shipping documents before releasing an order or deposit.
International Sourcing: what the sourcing record should show
| Area | What to record |
|---|---|
| Decision | Define who will export, import, arrange freight, clear customs and carry risk at each point. The contract, purchase order and Incoterm should describe the same operating arrangement. |
| Evidence | Verify the supplier, country of origin, product classification, required permits, payment instructions and shipping documents before releasing an order or deposit. |
| Watch point | International sourcing is not interchangeable with global sourcing. A company can source internationally from one country, while a global strategy deliberately manages several supply markets. |
What is a common International Sourcing mistake?
International sourcing is not interchangeable with global sourcing. A company can source internationally from one country, while a global strategy deliberately manages several supply markets.
