By: John Guthrie
Role: Financial Consultant
Below are top investments you should make before expanding your operation. Often, people don’t even know where to start. But either you can invest the time and money now before you make the leap or pay later trying to recoup. Read on and let me know your thoughts.
Financial Systems – Learn their system (if acquired in an acquisition) or get them on your system. Understand transaction cycles and how transactions are recorded – make it consistent with your own (except there are transactions that will be peculiar to the country so there will be differences). Make sure you get control of assets…cash, receivables, inventories and have fundamental separation of record keeping from asset control. Have someone on your US accounting team become a liaison to the foreign financial officer and develop a thorough understanding of their transactions and accounts. Also it’s probably worth spending some professional fees to have an accounting professional review the books from time to time.
Employment Practices – be highly selective – This rule is really an adjunct to the discussion above regarding culture. Attitudes, work practices, norms can all vary compared to western cultures in particular. Much time and money can (and most likely will) be lost in putting together your team.
Get the right professionals – accountant and lawyer – If you chose the right local partner (above) they should be able to connect you to good professionals (who in turn have their own influential networks to go along with their knowledge). They shouldn’t just be knowledgeable in local laws and regulations but should be experienced doing business with US companies and fluent in communication.