Whether we like it or not, the world economy is becoming increasingly vast as our markets become increasingly global. Even small local businesses can suddenly find themselves making deals beyond national borders and across multiple languages. Instantaneous international communication and web-based commerce have democratized transnational business, making it easier than ever for businesses to reach customers in practically every corner of the world.
And you know what? That can be freakin’ scary. There is just so much to think about when a company expands globally. However, I’m going focus on upgrading your expense management game.
When your company grows beyond one country’s borders, a lot of stars have to align to make the expense management transition smooth. Fortunately, we live in a golden age of cloud-based software, where magical unicorns dance on rainbows of big data. Whether you are sending employees to customers in other countries or you are hiring employees abroad, the cloud can meet your company’s needs.
But, as one might expect, there is more to international expansion than meets the eye. Here, then, are a few things that you might want to consider when elevating your expense reimbursement process into the big time.
Add some international spice to your policy
The last time you heard from us on this blog, we talked about how to keep your policy fresh. Once you expand to other countries, it’s time to freshen it even more by adding information specific to those additional territories.
There will certainly be a lot already in your policy that can easily apply to your expanded geography. But depending on where you are expanding, there may be some country-specific peculiarities that must be addressed. Whether to meet local regulatory requirements or age-old cultural imperatives, expense rules are not always universal.
In Japan, for example, the practice of gift-giving is just a natural part of everyday business etiquette. Exchanging gifts at first meetings is expected; expensive gifts can be common during business dealings, and are not considered to be bribes. Little gifts, called omiyage, are also common between colleagues, especially after one has been travelling. Even if your company chooses not to reimburse these special types of gifts, it should be clearly stated in your expense policy how employees should handle them.
Such nuances in policy can be very common. From the federally-mandated allowances on meals in Germany, to the requirement for some companies to include travel diaries in Australia, to the variations in mileage reimbursement in the UK and France, there are a lot of country-specific items that companies should consider when enhancing their policy.
Add some of that spice to your system, too
Of course, once you’ve added all that tasty international flavor to your policy, you’ll need to spend some time making sure your expense management software reflects all that multi-national goodness. Cloud automation makes a lot of that really easy. However, there are a lot of things to consider when configuring your system for international usage; it’s not always a simple matter of converting your policy items into workable rules. Sometimes there are broader questions you need to address.
At the most basic level is language. The Concur interface now supports twenty-one languages out of the box, which covers a lot of ground. Any customizations you’ve made to the system (e.g. Expense Types, Missing Receipt Affidavits, Exception Messages) will, in many cases, need to be translated so native-speakers of the other language can understand them. What happens though, if you have users in China who are entering their expense reports in Chinese, but your internal expense report processors or auditors are all centralized in the United States? On the other hand, if you require all expense reports to be in English, won’t that make it more difficult for non-native speakers?
As for other types of region-specific functionality, Concur is pretty flexible. It allows companies to create different sets of rules that can apply to different sets of users. Therefore, our users in Frankfurt can have their meal travel-allowances, our users in Osaka can have that special omiyage Expense Type, and those folks in London can get reimbursed for riding their bike to work.
Of course, your company’s mileage may vary (pun-intended).
Make your accountants happy, while you’re at it
Value-added tax. Consumption tax. Goods and services tax. Fringe benefits tax.
Hey, wake up! You drifted off there, for a second…
Everyone’s favorite topic is tax. And by everyone, I mean a very small percentage of the population who make a good living understanding all the different types of tax there are in the world.
Many of those people work for various governmental bureaus, and expect people at your company to understand enough about taxes to make all your filings correctly and on time. Luckily for our clients, we have a tax nerd on our staff who has an almost unsettling fascination for taxes and how to implement them in Concur. Probably because he’s Swiss.
Make no mistake, claiming and reporting the various taxes correctly wherever you do business is critical. Where expenses are concerned, there can sometimes be a balancing act between what is reimbursable and what suddenly becomes taxable income to the employee. Additionally, understanding what types of spend are taxed at what rates and under what circumstances can be tricky.
The biggest challenge here is making the tax-reporting process easy for your average non-accountant users to understand. Fortunately, once your accountants have worked out all the distinctions of your tax-reporting obligations, Concur has built-in tools that can help you keep it all straight behind the scenes so your users don’t have to worry about the details.
Obviously, there is a lot more to globalizing your expense management process than what we’ve talked about here. The areas mentioned above are where I see a lot of pain-points occurring with a lot of clients. Our goal at The Lyndon Group, in partnership with Concur, is to make your company’s globalization effort as pain-free as possible.