Going Global: Why It Pays To First Create A Strong Finance Function For Your Business

Having best of breed compliance technology in place will help your enterprise stay on the right side of the authorities elsewhere in the world.

Is offshore expansion part of your company’s growth plan for FY2025? If the answer is yes, congratulations and good luck.

Australia remains a relatively small market by global standards and selling into, or setting up shop, in other jurisdictions can be a smart move for local businesses that have ambitions to grow beyond the bounds of what’s possible in this country. 

Plenty of homegrown success stories have pulled it off; demonstrating what’s possible for local brands that are able to offer customers a compelling value proposition and top-notch service to match. Take Ugg, for example, manufacturer of the eponymous sheepskin boots that have been keeping Aussies’ toes warm since the 1960s.  Or Cotton On, the local label that’s grown from a single store in Geelong to a global fashion force, with 1500 stores in 22 countries and counting.

Launching into new markets with the right foundation

Success like this rarely occurs by chance. Most businesses that have made a good fist of offshore expansion have done so off the back of extensive planning and working with the right advisors.

If you’re smart, you’ll take a leaf out of their books: conducting extensive research, tapping experienced advisors, and ensuring you have systems and processes in place to help you manage a business that will be operating around the clock.

World class stock control and customer service functions are essential and so are systems that allow you to process orders and invoice customers accurately, in their local currencies and with the appropriate local taxes added on, if applicable.

Collecting and remitting the right tax to government tax authorities in every jurisdiction in which your business operates, and ensuring returns are completed correctly and lodged on time, is also vital.

The compliance challenge

This is no easy feat and especially not if your enterprise enters multiple new countries within a short period of time.

In fact, it’s impossible to manually track all the tax rate and rule changes in 190-plus countries around the world.

One of the biggest targets for international sellers is the U.S., where in 2023 alone there were 11,192 sales and use tax updates across more than 13,000 taxing jurisdictions. That works out to more than 30 changes a day, every day of the year – andmissing even a handful of them could put a new market entrant at risk for fines, penalties and other associated audit risks.

Tools to make the task easy

That’s where automated tax compliance technology has a critical role to play. These tools can be used to quickly and accurately calculate tax rates, prepare, file and remit returns, manage GST or value added tax registrations simply and securely, and collect, manage and store documents in accordance with the most stringent data protection regulations.

Deploying a cloud-based tax automation platform saves the average finance team around 15 hours a month of tax compliance work; valuable time that can be better spent on profit generating priorities.

These modern compliance technology options also make it easier for finance team members to collaborate across international borders and time zones, because one person can log off and someone else from a different region can simply pick up where they left off.

Choose a platform with powerful data analytics capabilities and your finance team will be able to deliver up-to-the-minute insights to the decision makers driving your organisation’s international expansion strategy too. When you’re setting up shop in a brand-new territory, that’s a benefit that’s difficult to overstate.

 Setting your business up for success at home and abroad

Entering one or more offshore markets can be a golden opportunity for your enterprise to grow its revenue and profits. Being smart and strategic in the way you go about it will increase your chances of long-term viability and protect the valuable business you’ve already built back home.

Implementing the right technology and processes, and seeking experienced advisory before you go global will enable you to more confidently navigate the complexity of foreign taxation and compliance regimes. And in doing so you’ll free your team up to focus on what matters most: delivering a world class offering to each and every new customer who chooses to spend their pounds, dollars or pesos with you.

Chris Calverley is Head of Sales and Partnerships – ANZ at Avalara.

Last Updated on October 16, 2024 by Chris Calverley