With the Aussie dollar struggling under 70 US cents, businesses eyeing expansion in the near future are looking at exporting as a golden opportunity. But there’s a catch: one mistake with Harmonized System (HS) codes and your shipment could be blocked, your costs could rise, and your customers could be left fuming.
We tapped Chris Calverley, Head of Sales and Partnerships, ANZ with Avalara, who reveals why these codes are non-negotiable and how tech can save the day. “Is becoming a successful exporter one of your goals for FY2026? It’s an attractive option for Australian businesses that have maxed out their growth opportunities here at home but still have the capacity and desire to expand their footprint,” he says.
With the Aussie dollar down, timing’s everything. “And with our dollar likely to continue languishing in the sub-US70 cent doldrums for a while yet, quality Aussie goods can represent an attractive bargain for customers in countries whose currency is stronger than our own,” Calverley points out.
The hurdle
Exporting, however, isn’t without its challenges. “Entering the export game is no simple matter. Far from it,” he warns. “There’s lots you’ll need to attend to on the admin front, if you want to ensure your offshore foray doesn’t degenerate into an expensive fiasco.” His top tip: master HS codes fast.
“Getting to grips with how Harmonized System (commonly known as HS or Tariff) codes work should be top of the To Do list,” Calverley insists. So what’s the deal with these codes? “HS codes are used to identify products across international borders. They make it easy for Customs services around the world to determine the correct tariffs to levy on goods coming in and out of their respective jurisdictions,” he explains. They’re global gospel—“For that reason, their use is mandated in more than 200 countries, including all those with developed economies where Australian products are most likely to find a market,” Calverley adds.
It’s a precise system, and that’s where it gets hairy. “HS codes vary in size from six to 10 digits, depending on the extent to which a country seeks to segment the products that are leaving and landing on its shores,” he says. Take coffee: “Irrespective of whether a particular product originated in Australia or Argentina, the first four digits of its HS code will always be the same. Take coffee, for example. If it’s unroasted, its HS code in this country is 0901.11.00. Decaffeinate it and you’ll need to change a couple of digits, to 0901.12.00. Roast it and it’s 0901.21.00.”
Tools to dodge the chaos
One slip, and you’re toast. “In short, it’s a complex area and the consequences of getting an HS code wrong, by even a single digit, can be significant,” Calverley cautions. He’s got examples: “Diamonds and mushrooms, for example, share the same code bar one numeral but attract vastly different duties in many countries.” The fallout’s brutal—“Apply an incorrect code and there’s a risk your shipment will be rejected by Customs, confiscated or held up for weeks—not a good look when you have customers waiting on a delivery they may have expected would lob on their doorstep within days,” he says. Underpay duty?
“If you’ve underpaid the duty, you’ll be hit up for the difference and, in many jurisdictions, have a heavy fine imposed for good measure.” Overpay? “Conversely, should you find out after the fact that you’ve shelled out more than you should have, as a result of incorrect HS classifications, there’s every likelihood you’ll be whistling for a refund.” Calverley’s seen these “unwelcome complications and costs sap fledgling exporters’ resources and hamper their growth.”
The good news is that these risks are entirely avoidable. “Harnessing the power of automated tax compliance technology can help you assign the correct HS codes to your products, first time, every time,” Calverley says. Calverley’s all about efficiency: “It’s designed to help international sellers do business in a digital world by simplifying and streamlining all the tasks associated with the tax compliance process—think registration, licensing, classification, calculation, document management, reporting and e-invoicing.”
Calverley’s tech solution shines with tools like Avalara, which uses AI to analyze product data and assign spot-on HS codes, syncing with Shopify, SAP, or NetSuite for a seamless operation. It’s perfect for Aussie exporters hitting 180+ countries, catching mistakes before Customs does. “Invest in a system that includes automated HS code classification capacity and you’ll be able to generate accurate HS codes for your products and calculate the tariffs on them correctly, along with a range of other indirect taxes, including US sales taxes and Value Added Tax in the EU,” he advises.
There’s more in the toolbox, too. Descartes CustomsInfo pairs a massive customs database with machine learning, ideal for logistics pros needing precision across 160+ markets. TradeGecko (now QuickBooks Commerce) ties HS codes into inventory for ecommerce startups, though it’s less AI-driven. For a leaner pick, CustomsManager offers affordable, AI-assisted classification—great for small players testing the waters.
Calverley’s advice is clear: pick a tool that fits your setup. “Partner with a vendor whose solution integrates with your ecommerce platform, billing program and ERP or Accounting solutions, and ask if and how they’re using the latest AI advances to further simplify the HS code classification process for sellers,” he says. “Smart AI, including machine learning and natural language processing, is changing the game for cross-border sellers. Choose the right tech partner and you’ll enjoy peace of mind that your export journey is commencing on the right foot.”
For Calverley, it’s about building something lasting. “Selling overseas can represent an unparalleled opportunity for your business to grow, provided you implement back-office infrastructure that supports your foray into foreign markets,” he says. Tech’s the backbone—“By correctly applying HS codes and calculating the corresponding tariffs, an automated tax compliance platform can help you manage the complex process of exporting your wares, and provide surety that your business remains compliant.”
“If building a sustainable overseas revenue stream is a priority for your business in FY2026, it’s enabling technology that’s well worth the investment.”
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