Top 5 Tariff Pitfalls in Microsoft Dynamics 365 Supply Chain Management — And How to Avoid Them

Navigating global tariff pitfalls with Microsoft Dynamics 365 Supply Chain Management (D365 SCM) requires more than just data—it requires discipline. Companies that treat tariffs as afterthoughts often fall into avoidable traps, resulting in compliance violations, eroded margins, and operational delays.

Here are five of the most common—and costly—tariff pitfalls and how to address them with D365 SCM:

1. Improper HS Code Classification

Incorrect classifications lead to incorrect duty rates and delayed shipments. D365 SCM enables businesses to store and validate HS codes per item, ensuring that tariff rules are applied accurately and consistently.

2. Reactive Strategy to Geopolitical Shifts

Tariff policies change rapidly, often with little warning. Businesses that lack visibility into trade flows may find themselves reacting too late. With D365’s forecasting and simulation tools, users can prepare for alternative sourcing and tariff impact scenarios.

3. Incorrect Intercompany Markups

Tariffs are assessed on transaction values—if intercompany pricing isn’t correctly configured, your duties could be inflated. D365 SCM provides robust intercompany pricing controls that ensure compliance with trade valuation rules.

4. Blending Tariffs into Product Cost

Embedding tariffs directly into product cost hides visibility. D365 SCM supports landed cost separation, allowing tariffs to be tracked independently for accurate COGS and margin reporting.

5. Missing Documentation for Audits

Without proper documentation, audits can result in costly penalties. D365 SCM offers document management capabilities, ensuring customs records, certificates, and tariff classifications are attached and accessible.

Conclusion
Each of these tariff pitfalls can derail your trade compliance strategy—but they can be prevented. With the right D365 SCM configurations, process controls, and expert guidance, you can create a system that not only avoids risk but builds resilience. Need help getting started? Explore our full approach in the companion blog: Turning Tariff Strategy into Competitive Advantage with D365 SCM.

Next Steps

If you want to learn more about tariff strategy in Microsoft Dynamics 365 Supply Chain Management, contact us here to learn how we can help you grow your business. You can also email us at info@loganconsulting.com or call (312) 345-8817.