Not every country does business the same way. While global management information requirements may be consistent across countries, multinational organizations must also address a myriad of disparate statutory, regulatory (accounting and audit), and cultural business practices, observes Thomson Reuters. With the right enterprise resource planning (ERP) system, you can manage your operations across multiple locations—and provide localized support for every country where you do business. But that's not all.
While screen translation is often among the first things many people think of when evaluating an application for a foreign market, the reality is that translations are relatively easy to deliver simply, yet cannot compensate for a product that otherwise fails to meet local requirements. For example, how helpful is it that an application is translated into French, German, Spanish, and Italian if transactions can only be recorded in US dollars?
At the same time, trading in multiple currencies is common practice with transactions of any currency posted to a single account (whether general ledger, customer, or vendor account), with currency varying within a single transaction cycle (order, invoice, and payment). Multiple base currencies are required with global companies reporting in both local and corporate currencies, regardless the language.
Support for multiple currencies is table stakes for any international product review, but taxation must also not be overlooked. While death and taxes may be the only two guarantees in life, no two countries calculate tax the same way. Even value added tax (VAT)—a concept that appears nearly universal outside of the US—varies greatly from country to country. Multiple indirect tax regimes require parameterized tax entry, calculation, and reporting. Not only does this cover VAT, but it also covers sales tax, withholding tax (for monies paid to professionals or agents via accounts payable), environmental taxes, customs duties, and reverse charges.
These transactions must all then be reported in compliance with both local generally accepted accounting principles (GAAP) and international accounting standards, such as International Financial Reporting Standards (IFRS), which are used by 52% of Fortune Global 500 companies.
In some countries, either by law or convention, this also requires companies to follow a national chart of account plan. For example, France's Plan Comptable Général represents a company's financial accounting using pre-defined codes, while analytical (aka cost) accounting is performed by either extending the national account code or by a separate parallel code. Thus, multinationals—and their business systems—may need to support up to three separate charts of account (COA): the national plan code, the analytical code, and the corporate reporting code.
Explore the resources below to learn more about how linking your global operations together with one single, industry-tailored enterprise application suite can help you avoid many of these pitfalls that can slow down multinational growth. Not only should your solution meet your specific business needs, but choosing to deploy in the cloud can help you to realize even more benefits, including increased data security, faster updates to more innovative applications, and a lower total cost of ownership.