While living in a global village with different countries trying to relax cross-border business policies, no wonder we see more multinational companies trying to expand their businesses than ever before. Different companies are crossing borders to penetrate the economic markets of different countries and try their luck. Thankfully, many of them launch international ventures successfully. However, despite economic growth and business expansion, cross-border businesses also have to face multiple problems.
It is not only about finding local labor, complying with the rules of the host countries, and changing the business model to fit into the new country. It is also about solving international transactions and money transferring problems that are common issues of transnational organizations. This issue might sound naive, but it can become the reason for a business’ downfall in case of delayed payments to vendors. So, it’s essential to sort out international transaction problems on a priority basis.
Here are a few tips that can help you overcome international transaction challenges:
- Employer of Record
Every country has different tax, payroll, and labor laws that make it hard for companies to operate businesses in other countries. Because the inability to comply with legal matters can end you up with fines and penalties, worst, your company might get blacklisted. Obviously, no company wants to fall into pit holes instead of flourishing the business. That’s where an employer of record (EOR) can help you.
An EOR is a legal entity with established footprints in the targeted country. So, carrying transactions through an employer of record becomes easier and risk-free. You can easily expand in a new country without tapping into a legal issue.
- Money Transfer
Transferring money for payroll or rolling out payments to vendors can be problematic. Either you don’t get a reliable payment system, or the international wire company charges a hefty amount for their money transfer services. It can be very difficult and time-consuming if you deal with different vendors daily. You can use the services of companies that help set up a business, like doola, or stripe companies to come out of the silo. Stripe has a great transaction process with a cost-efficient model with an option to accept various currencies. So, it is an all-square solution for your business.
Another way is to ditch wire services and transfer money to foreign bank accounts. This lets a global payment processor transfer money to the employee account. It is a fast and cost-efficient process. So, your life becomes much easier this way.
- Timely Payments
Recall all those times when you got your salary a couple of days late. It was annoying, frustrating, and panicky – right? Everybody wants their correct payroll on time (wouldn’t mind if it is earlier than the payroll date – eh!). However, receiving it late is psychological torture because all your expenses become your nightmare. So, your employees also expect from you a timely payment of their payroll.
However, transferring money internationally is a different game than domestic transfer. It might take more than expected time, and you might lose track of things. The good thing is that things can be sorted by using a system that rolls out pay within time so that the banking system gets enough time to clear funds and run them on time.
- Account Validation
Each country has a different banking system and requirements to open an account, so account validation is a huge challenge for international companies. Adding accurate information, avoiding any mistakes, and the possibility of leaking information are important to avoid any rejection or mishap. However, global payment platforms have a built-in function and information about each country’s banking system.
There is a minimal chance of any mistake because the system automatically fills out the information, eliminates the possibility of error, and secures data. So, everything works smoothly!
- Payroll Rates
If your employee is working in France, but the payroll is decided in the US dollar, you would have to pay the person by converting French Euros into US dollars. Whatever the dollar’s rate is in French Euro at the time of rolling pay, you would have to pay the payroll according to that. It isn’t easy to take back cards if they are once displayed on the board. So, be very careful while calculating the payment to avoid earning a bad name or a negative review by the employees.
- Finding a Good Platform
This issue is very common and maybe the most difficult one because all other factors directly or indirectly rely on this factor. If you are not taking services of an international wire company, you still need some money transfer company’s service. That’s where a global payment processor business comes in handy. However, it is needless to say that every payment processing company doesn’t give the same services. Some are good, others are bad, and others are the worst. Now you have to find the best one. It will be a huge struggle, but there isn’t any way out.
Make sure your selected company charges less, has a secure and fast payment process, automatically fills out details, and gives you hassle-free services. Choosing the right company will go a long way, and you will leverage numerous benefits in multiple ways.
Living in a world where transborder business is becoming easier and more common, it is such a waste not to expand your business to other potential countries. However, obviously, this is not a piece of cake. You will face many hurdles and difficulties that might sometimes make you feel helpless and stranded. But doing proper research, finding the best solutions, and making the right choices can make a difference.
Just like other issues, international transaction challenges are also huge enough to obscure you from expanding global footprints. However, making smart choices and avoiding common mistakes can help you avoid issues and strengthen your impressions in the market of any country.