How to expand internationally without increasing finance headcount
Did you know you can expand your business overseas without increasing your Finance headcount, saving you huge sums year after year? Even if you set up a major operation overseas, it is possible to meet all Finance needs and obligations without hiring any new Finance personnel in your new country. This solution delivers many other advantages in addition to low costs, i.e.:
- You provide your existing Finance staff with exciting and challenging international personal development opportunities.
- Your reporting, systems and controls is consistent across the group, so it is easier for you to know what is happening internationally
- You get cost-effective access to local specialists, who keep you compliant and updated on changes in local regulations
- It is a scalable model, which you can easily repeat when you expand into other countries in future.
- You avoid the future problems associated with small overseas finance teams, such as over-reliance on a few key individuals and poor career development
So how is it done? These are the five essential steps you need to follow:
- Create your new international entity in your existing Finance system. Prepare the month end accounting for this entity in your normal reporting GAAP. Book any recharges to and from other group entities in line with Transfer Pricing agreements, e.g. cost plus markups.
- Bill the customers in that country from an existing Group legal entity. If this is not possible, then configure your existing billing systems to bill from the new country legal entity so that you can manage this billing from HQ.
- Configure your Accounts Payable system so it can handle your new country entity and suppliers. Your existing AP team can then manage these international supplier payments.
- Outsource the country payroll to a local supplier and manage this from your existing payroll team.
- Outsource to a local accountant who will convert into local GAAP and prepare statutory accounts and local records if required. As corporate income tax is derived from the accounting data, ideally the same accountant should prepare your tax returns.
If this appeals to you, we strongly recommend you work with an experienced adviser to get this right first time. So if you would like to learn more about how to make this happen, please contact me for an informal conversation. Our global team is highly experienced and we are help many companies to improve their international finance operation.
What Measures Could Businesses Expect to See in the Autumn Budget?
This year’s autumn budget will be delivered by the UK government at the end of October, a week after the Brexit summit in Brussels, and before another key Brussels Brexit summit in mid-November.continue to read
What Does the Italian Election Mean for International Business?
One common thread throughout all of the political party campaigns in Italy’s recent election was the promise of stimulating the moribund Italian economy.continue to read
What Do Trump’s Tariffs Mean for International Business?
Over the last few months, the US and China have been engaged in an increasingly acrimonious war of words over tradecontinue to read