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5 reasons finance leaders struggle to manage global spend


5 reasons finance leaders struggle to manage global spend

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To successfully operate globally, you need to start thinking locally.

Whether you’re opening offices in new countries, hiring employees abroad, or bringing on customers and vendors in new markets, global expansion marks an important milestone for many organizations.

But for finance leaders, such expansion adds new complexities not only to your people and payroll processes but also your tax, accounting, and spend management processes. Yet most spend management tools aren’t built for global operations.

Some providers may tout “global” capabilities, but very few actually support a truly global set of countries and currencies. In reality, their cards simply work internationally just like every Mastercard or Visa does, or they may serve a few additional non-US markets.

So as companies expand, they tend to amass multiple corporate cards, expense management tools, travel platforms, procurement solutions, and other expensive infrastructure, usually because they started in one location with a solution that turns out to not work in others. Finance and IT teams then have to manage multiple systems, expensive IT integrations, and unsustainable technology sprawl, which creates a ton of manual work, poor visibility, and excess cost.

To effectively manage spend on a global scale, it’s important to change how we think about the term “global.” Operating globally really means the ability to operate in new countries and supporting local currencies, regulations, and customs in each.

So what’s holding organizations back from efficiently expanding into new geographies? Finance leaders struggle to manage global spend because they lack a system that enables them to:

  • Operate in local currencies. Sure, some legacy vendors may support a few of the most popular currencies, but is that driving which geographies you’re expanding into? Probably not. Things like corporate cards, budgets, and reimbursements in local currencies expedite payment processing, reduce intercompany transactions, and reduce foreign transaction fees.
  • Ensure compliance in every country they do business in. You might be able to spend anywhere, but can you close the books on time globally? AI-driven technology can automate much of your spend processes to ensure you have the right tax and expense documentation to maintain compliance and close the books faster.
  • Adapt policies and processes to local markets. When you can issue spending budgets in local currencies, create localized expense policies, and support different customs to manage travel, per-diems, stipends, reimbursements, and procurement, you increase your ability to operate globally.
  • Deliver an exceptional experience for everyone. People will adhere to processes globally if the system is easy to use. Providing localized experiences for every member of your team is critical for adoption. So when finance leads and accounting teams instill a similar set of spend management principles and processes for everyone — and employees feel comfortable using the system to follow those processes — employees are more likely to comply.
  • Bring all spend into one dashboard for real-time visibility. Using separate card programs and processes for spend in individual countries clouds visibility into overall spend. With access to all of your global spend in one dashboard, you can see how you’re tracking against a budget in real time, understand ROI on investments like travel, and even redirect money toward more meaningful programs.

The most effective way to expand globally, then, is to operate locally, wherever that may be. We go into much more detail on considerations, strategies, and best practices for expanding internationally in our ebook “The finance leader’s guide to managing global spend.”

Download your free copy today and discover the unified spend management approach that’s driving long-term business success for global organizations.

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