These days, everyone thinks globally. The internet has given us the ability to cross any physical borders if you’re willing to ship to another country or provide a service there. Yet it’s not second nature yet. When businesses look to official, overseas expansion as a way to stake their claim on a market, smart accounting is critical to success. There’s a lot to set up and manage. Eyeing global expansion? Here are five accounting tips to help you navigate the complexities around finance.

Accounting Tips

Research and Speak to Potential Banking Partners

Few foreign banks are alike. Some are better for overseas business, charging you less for transactions and currency exchange. Likewise, others may have preferential lending criteria for small, medium or large organisations, as well as varying types of accounts (such as offshore, in-country and multi-currency). Good research is essential, and it pays to shop around.

Automate Tax Data

Laws may change from place to place, but the way in which you adapt to them doesn’t have to follow suit. Sophisticated accounting platforms, like Xero, are a great investment. They can calculate separate balances for each currency you bring in, informed by the rules of that particular nation. Accountants can then use the data to submit returns or claim relief on your behalf. When the data is automated, it is dealt with much faster, and records for every piece of multinational income are securely stored and easily accessible.

Understand What You Can Claim

Differences in tax law also feed into expense claims. Equipment, uniforms, vehicles, and business trips may classify, but you should never leave it to chance. A few mistakes can significantly cost your business. Depending on the size of your organisation, a substantial amount of money can be saved in multinational tax. Several, unique expense accounts can make this easier to record and manage.

Consider Fiscal Control Frameworks

How will another Head Office manage their own cash? Guidelines and best practices should be laid down before you expand. That way, there’ll be no clash of interests between you and the offshore entity. Budget control, local lending requests and salary limitations must be recognised. Make it official with a contract too – that way no one is left in any doubt as to what may happen if these terms are broken.

Retain a Strong Cash Flow to Deal With Surprises

Overseas ventures can run into all sorts of problems. Positive cash flow is the best way to keep your business agile. A service or product that’s popular in one country, for example, may fail in another. Or it could lose out to a first-mover competitor. Don’t expand if your cash flow on home turf isn’t leaving funds free for an emergency budget. You may need more time, resources or investments to make something work. While this may cost you in the short term, it can help you out immensely in the long run.

Going global is the dream for many businesses. We can help you reach it, with tailored and extensive financial expertise. Contact RJF Accounting to learn why we have the commercial skills you’ll require for this leap overseas.

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