However, there are a number of operational challenges associated with international expansion which are making organisations think twice, according to our recent Going Global survey.
If you’re considering your growth options, or you’re already in the process of expanding internationally, here are five things you should know regarding common concerns and how to overcome them:
1. You?re not alone in feeling daunted
Only 11% of organisations feel qualified to successfully address all aspects and challenges of global expansion. The aspects that companies feel least qualified to successfully address include knowledge of local markets (33%), different tax codes (32%), foreign exchange volatility (31%), hiring to support international expansion (31%) and compliance and regulatory risk (30%).
These are all familiar challenges, however, today’s fintech and regtech offerings are allowing small and mid-sized companies to rise above them.
2. Communication will be key
When conducting business across borders, it’s crucial to be clear on intent as misunderstandings can derail expectations and relationships. Being linguistically and culturally aware when dealing with partners requires not only translation, but a prescribed approach to handling those communications.
That includes the use of localised online portals for communication and the exchange of information, as well as standardized emails for process-oriented communications and notifications.
3. Regtech will be a mainstay in your global operations
Conducting business compliantly can be a challenge even in your home country. But once you start going global, many more new requirements surface. For example, how do you know if business partners are legitimate entities” Are you verifying them using government blacklists or getting proper identification information” What are the tax implications of working with them”
This is where regtech comes in. It has the ability to provide greater control around processes by leveraging the autonomic capabilities of software, and establishes checks against rules and conditions.
4. Your finance team will be your closest ally
It’s crucial that you tap into the expertise within your finance team, and access strategic advice which will support your business” growth ambitions. For example, they may be able to share insights around how to optimise working capital and scale globally more efficiently.
The key is to make sure the right technology and infrastructure is in place to help these knowledgeable individuals shift their focus from managing the details of financial operations and supplier payment processing to delivering higher value guidance to the business.
5. Hiring is not always the answer
If you’re currently a one-country business, your finance and operations functions will become much more involved processes when you expand to multiple territories. From addressing currency concerns to ensuring funds properly land into a supplier’s bank account, there is far more to manage.
While some businesses address these issues by hiring staff, savvy finance departments leverage technology solutions that meet and adapt to the very dynamic world of global payment processing.
International expansion can be challenging for small and mid-sized companies, and always subject to financial, political, and regulatory uncertainties, back-office technology has evolved to support international expansion, streamline operations, and keep pace with changing banking systems and tax regulations.
There should be no reason why you can’t maximize the opportunities in new markets and achieve global success.
Chen Amit is CEO at Tipalti.