In the increasingly volatile and regulation-filled business world, the ability to adapt is of utmost importance. But handling change and complexity is a challenge for companies, especially when they try to step out of the domestic environment and into the global zone.
During the transition, many find themselves trying to avoid incurring costs and disruptions by sticking with their existing accounting software. However, if businesses do not conduct comprehensive evaluations of their needs and software capabilities, they may well end up paying more than they could save. Why? Because the finance function spends hours checking for and correcting errors whilst they should be providing accurate and timely financial reports and analysis.
What should businesses look for in a global finance system then?
Handling currency complexity
Rapid globalisation means that businesses are likely to report in more than one currency. Thus, deploying multi-currency accounting software is tremendously helpful. However, it is worth noting that currency translation is not as simple as it looks. Complexity arises when different categories of exchange rates are required under certain circumstances. This is especially problematic when companies have to follow more than one set of accounting and business rules.
Handling multiple languages
Even though, globally, English is the default business language, everyone in an organisation will not necessarily grasp all English terminology and statutory reports, especially those that handle day-to-day operations. They are more likely to do the work in their own language. Moreover, different countries have different units of measurements and formats, which need to be reported as well. Hence, it is vital that the financial management software of a company seeking globalisation can handle all of these.
Handling multiple entities
A business with various branches in different countries or jurisdictions has extra workload that entails complexity. As a helping tool, a global finance system should be capable of consolidating results from discrete entities for statutory reporting and tax purposes. In other words, multi-company accounting software should help the mother company and its subsidiaries keep track of one another’s financials without interfering with their various legal structures.
Stay tuned for the next blog post to find out other criteria for an effective global finance system. Can’t wait? Take a look at a market-leading global finance solution now!