There are many dates, tax articles, regulations, collective agreements and processes that an international growth company has to keep in mind. In addition to daily routines, a company also has to manage rapidly changing national legislations. Companies have three options: to do themselves, to outsource or to search for partners. This can be relieved by outsourcing financial management to service providers operating in multiple countries.
Outsourcing financial management reduces workload due to other processes as well, the partner is responsible for training personnel, recruitment and organizing replacements. The precisely selected partner ensures the steady quality and lawfulness of the service. A professional partner will also provide the most proven processes and systems that support a company’s growth.
An international growth company faces many stumbling blocks, such as communication issues, processes lagging behind as well as slow and inconsistent reporting. Finding a reliable partner and entering a new market can be a complicated process. Investigating local business legislation and regulations can be challenging and take a long time. As these challenges continue in many countries will financial management be cumbersome and resource consuming during internationalization.
1. Communication issues with partners from different countries
Working together with most partners often necessitates adding resources to the company’s own financial department to ensure coordination, instructions and training with partners.
2. Processes lagging behind
International operations and managing the financial management of multiple countries and partners often contribute to processes lagging behind. Digital, scalable service processes and forerunner technology are speeding up the processes and ensuring business growth.
3. Slow and inconsistent reporting
For an international group, real-time transparency for subsidiaries is vital. Slow and inconsistent reporting can make figures unreliable. Consistent accounting and reporting principles are essential at the group level.
4. Managing country-specific discrepancies
Ignorance of the local practices and legislations of a new country is often the main barrier for expanding into new markets. Understanding the rule of law and local accounting methods can be complicated. Making compliance reports is challenging due to country-specific variations. For example, companies should take in consideration possible changes in employment contracts and travel instructions.
How to avoid stumbling blocks
Staria’s Global Accounting service concept is designed to help internationally operating growth companies from regulatory reporting to consistent accounting policies. The concept enables a consolidated and real-time transparency for the subsidiaries of an international group.
Outsourcing financial services begins with determining the client’s needs and reviewing their practices. After that, processes are optimized to be as simple as possible and automated by utilizing digital services, RPA, AI as well as Staria’s best practice -processes. The client receives its own assigned team, which handles the client’s financial matters for all customer’s countries. The same team takes care of the client’s international companies, so that the financial management is handled in a centralized way. According to clients, it is convenient that management and accounting related matters are managed by a team that speaks the same language and operates in Finland, but which is also fluent with the target country’s rule of law and accounting principles.
The Global Accounting service has no geographical borders, and we are expanding our service based on our clients’ needs worldwide. At best, operations at the new country can be started soon. It’s a relief to know when working with a professional partner that everything is dealt in a flexible and correct way.
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We have prepared a guide covering various scenarios describing how companies generally avoid problems with international financial administration, as well as the pros and cons of the various solutions. Read more.