7 ERP challenges to managing a global business…and how to tackle them
This article is written by Yvette Ross, Director of Product Marketing with FinancialForce. Her goal is to help organizations understand the value of the right cloud platform and how it can help organizations run a most intelligent, agile, and connected business.
Managing a global business has never been more complex. Whether you’re already operating globally or planning to expand into new markets, running a connected global business where operations are standardized across multiple geographies can be a daunting task.
A key to success is understanding seven core ERP challenges facing today’s global business — and having a partner that’s well equipped to help you surmount them.
Challenge #1: Regulatory compliance
Every country has its own set of rules for accounting and financial reporting. Keeping track of all these disparate regulations can be overwhelming. Global businesses that don’t follow accounting standards in local, country-specific currencies risk legal issues or hefty fines and penalties.
Moreover, subsidiaries in other countries may rely on different finance systems than the parent company. That can lead to inaccurate data, inefficient processes, and greater noncompliance risk. Adding another layer of complexity: Businesses may use GAAP, IFRS, or a combination of both.
A key to success is an ERP partner that supports both GAAP (US) and IFRS (global) models for accounting, as well as the ASC 606 revenue recognition model.
Challenge #2: Language barriers
When a business operates globally, it makes sense that they can communicate with customers and partners in their native language. Similarly, their accounting solutions must support multiple languages, so internal teams can be productive regardless of where the employee is based.
Thus, your ERP provider should leverage a global platform (such as Salesforce) that supports multiple languages — as well as enabling customers and partners to participate in the translation of the application.
Challenge #3: Tax codes
When expanding into new markets, understanding country-specific tax rules and rates can be challenging. Global businesses must keep up with different countries’ tax codes, domestic and abroad. Taxation can run a wide gamut of complexity, depending on the economic zone.
For that reason, it’s important to partner with a provider whose solutions support both simple and complex tax regimes. Their taxation reports could vary by geography and time, with VAT reporting for European countries to ensure that the solution is both current and compliant.
Challenge #4: e-invoicing
E-invoicing brings many benefits to an organization, including lower processing costs, more accurate invoices, better security, and faster payments. In turn, businesses must comply with multiple e-invoicing rules — such as digital signature or specific content requirements — that vary by jurisdiction. Tax authorities are also looking to collect VAT from businesses and modernize indirect tax reporting to ensure greater transparency surrounding VAT payments and recovery.
To meet these e-invoicing challenges, be sure your ERP partner complies with soon-to-be-mandated EU rules for B2B transactions. A solid start: supporting PEPPOL, a widely used standard for e-invoicing.
Challenge #5: Banking
The growth of many global businesses is restricted by fragmented payment and collection journeys. Also, manual banking processes — whether importing data from multiple systems or keying in customer bank details — waste A/R and A/P employees’ time and forfeit revenue.
The remedy is to enable customers to pay the way they want; that speeds up collections, reduces admin and errors, and accelerates growth. To that end, your ERP partner should support manual payment entries while also simplifying automated customer cash receipts and supplier payments and account reconciliation.
Challenge #6: Fragmented reporting
Reporting can improve the effectiveness and efficiency of an organization. But many businesses struggle with disparate reporting solutions — a problem that can be amplified when operating in multiple countries and across time zones.
To prevent fragmented reporting, choose a platform with award-winning reporting capabilities and analytics that can help you surface valuable insights and share data across the entire organization in a timely manner.
Challenge #7: Disparate solutions
If you have multiple entities in different countries, building localization features can be a potentially onerous task that increases product complexity. And continually monitoring regulatory changes can be time-consuming. For those reasons, consider the power of a single, global ERP solution that brings true global visibility and provides support for multi-x capabilities.
That solution can be provided by FinancialForce, today’s leading provider of end-to-end ERP solutions for global-minded service organizations. FinancialForce applications unite your business so you can put your customers at the center of everything they do — wherever in the world they are. With the right solutions and platform, your global business can run in a connected manner, deliver innovative experiences, surface customer insights, and achieve enterprise-wide agility.