Greater digital and technological capacity has, in many ways, lowered the barriers to international business expansion. And while some entrepreneurs can run a successful local operation, succeeding in a new country – or multiple countries – can end up being just as difficult as launching the business for the first time. This is because some companies aren't prepared for the level of business insight, organisation and efficiency required.
We've looked at three of the top challenges businesses face when expanding internationally, whether for the first time, the fifth, or the fiftieth, and how a cloud-based ERP platform like MYOB Advanced can improve their ability to succeed in a new country.
1. Tracking numerous business areas for multiple entities
When you open your business in a new country, suddenly you're faced with another set of data and processes to manage. Setting up a separate instance of your ERP for each country sounds like a good idea to keep everything neat; however, in reality, it can create more headaches such as:
- Having to manually consolidate data from each instance to run reports and compare business performance and sales in different countries or across different product lines.
- Paying for separate instances of the same ERP software, in addition to servers and IT maintenance for on-premise systems, which adds to operational costs.
- Spending inordinate amounts of time splitting purchases made centrally across different instances.
- Scaling up quickly with complex software when a new market opportunity arises.
Our client, DGR Global, used to spend around 380 hours preparing end of month reports by consolidating data for five listed companies and over 70 entities, all on separate MYOB AccountRight files. Consolidating their operations into MYOB Advanced saved them hundreds of hours of work every month, and is in fact all completed in just 80.
The intercompany module on MYOB Advanced allows them to use their purchasing power to buy for multiple companies, and invoice subsidiaries separately for their portion, with ease. MYOB creates all the interactions for the transaction without the finance team needing to process an invoice several times.
The cloud-based platform also allows relevant stakeholders to access consolidated data about inventory, shipping, sales, staff and finances, wherever they are in the world without the burden of on-premise costs and maintenance.
2. Understanding local business and tax regulations
A significant contributor to the complexity of international expansion is operating according to different tax rules, business laws and currencies.
You can spend hours converting one currency into another simply to get your monthly invoicing and purchasing finished. Not to mention setting up suppliers and paying them in the correct currency and correct timeframes.
Fortunately, moving to MYOB Advanced has helped DGR Global overcome these issues as it can manage multiple currencies, tax jurisdictions and time zones. To speed up supplier onboarding and invoicing, MYOB Advanced has allowed them to create a seamless process for capturing suppliers, proper approval processes and segmentation of duties. Automatic multicurrency conversion has also removed unnecessary manual admin. DGR Global’s CFO Priy Jayasuriya said, “It also remembers that different suppliers always bill in a particular currency,” he said.
Managing documentation for tax auditing purposes can also present a challenge. However, Priy said that the tool has “changed their lives" come audit time. "You can attach appropriate documentation to every transaction, so it's easy to show the evidence. We're not burning the midnight oil prepping for an audit," he says.
3. Adapting and innovating quickly for local conditions
Expanding your business into a new country means you’ll learn a tremendous amount very quickly and have to make dozens of decisions – fast. You may even find that you’ll have to make more changes to your business plans than you first anticipated.
Handling this steep learning curve and successfully making the necessary changes depends on how well you have your day-to-day operational management set up – from finances to inventory to staffing. If you’re spending too much time on the admin, you’ll struggle to find the time to make impactful business decisions that will help you meet local market conditions.
A cloud-based ERP like MYOB Advanced can make a significant difference. For the DGR Global team, ERP would let them access more timely reporting so they could step off their "hamster wheel" and analyse data.
Exobiz and MYOB Advanced can set you up for international business expansion success
Expanding a business into international markets is daunting; however, the process can be far smoother when the right business technology foundations are in place. Exobiz can set up your MYOB Advanced environment so that it easily scales as your business grows, while taking care of new tax and financial obligations. Contact us today to discuss your growth plans.