When your business is successful in its home market, the natural next step is taking your product or service to a wider audience. Today we are more equipped than ever to expand businesses locally, nationally, and even internationally, supported by a burgeoning culture of working from home and all of the resources and supportive technology available. But while expanding your business may be easier than ever, there are still some key considerations and steps to take, without which you might be setting up your business expansion project for disaster.
Understanding Local Compliance Rules
There are different tax compliance rules for different countries, and keeping up with all the new and constantly changing requirements, even in just one new jurisdiction, can eat up all of your time and energy. This is often the biggest hurdle faced by growing businesses. There are more and more compliance requirements and regulations, and it is difficult to keep up without supportive technology to enhance business expansion.
TMF Group offers a Global Business Complexity Index, which rates countries from a complexity standpoint, and they release it annually because of all of the change and nuance involved in compliance regulation. Non-compliance can result in fines, damage to your business reputation, jeopardize relationships, and block financing and sales.
Having the Right Technology
The best bet for ensuring compliance during a business expansion is to have a good Enterprise Resource Planning (ERP) technology from the outset. Choosing the right ERP is crucial since local authorities have different requirements that must be met. For example, some jurisdictions require the use of only ERP systems that have been certified by the government, and some countries require the use of an ERP that withdraws tax information from the outset or a system that communicates directly with auditors. For example, the UK made digital financial record keeping a requirement where taxation entities can pull data directly from ERPs without human intervention.
How to set up your financial reporting software, which technology to use, and whether the technology needs to be upgraded to communicate with local tax authorities are complex considerations. These considerations are even further complicated when you try to factor in your company’s five or ten-year priority projections.
How you leverage technology, and your chosen partners, defines your scalability in terms of ensuring that your multiple operating locations work similarly and each can produce and perform at the maximum level at any given time. Your ERP systems needs are configured correctly from the outset of your business expansion strategy, or else your company will face issues in the longer term, such as non-compliance, but it can also keep your business from expanding into certain areas if it is not transferable, requiring you to fully transfer your company to a new system or else abandon hopes of moving into that market.
Underpinning all these best practices is the importance of implementing underlying policies and processes that are standardized to keep up with the rapid transformations occurring. Usually, businesses require assistance in this area to help understand how processes should look and whether they can be enhanced to perform better, particularly in the face of a global expansion. Having standardized processes help with expansion considerations because then there is no need to reinvent processes that are standards because there is already one policy or protocol serving as the best approach.
There are so many variables with different business cases and tools (let alone legal and compliance factors), so it is crucial to have a unified approach as everyday issues in service require procedures to be responsive and organized.
Considerations like making the right senior hires and understanding the local cultural values can keep you out of hot water when expanding into a new area. But above are the considerations that will make the biggest impact on your expansion and what can make or break your chances of success. Having the right partners, which should include an ERP specialist like be one solutions, who can help navigate and even take on some of the leg work involved in international business expansion, because the last thing you want is to be caught off guard for not fully understanding these keys to success.
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