Outsourcing accounting services to multinational companies: benefits and reasons
These days, many entrepreneurs choose to outsource their financial management services to optimize time and reduce costs. But have you ever thought about what are the main advantages of choosing an accounting firm for multinationals?
Generally, accounting for multinationals is a very complex and delicate process. This is because the routine of companies involves regulations and tax rules from different countries. When handled negligently, these obligations can cause inconvenience and, in more extreme cases, even bankruptcy.
Therefore have an accountant with specific knowledge to perform this function. Mainly, to deal with the differences between tax regimes and keep all financial data organized according to each legislation.
It's important to note that there are also other variables to consider: the validity of international treaties, operating conditions in each country and other tax aspects that can directly influence the company's operations. In this case, outsourcing these activities to an accounting firm for multinationals is one of the best ways of doing business. avoid any problems in the future.
Do you still have doubts about this?
In today's article, we'll explain how an accounting firm can help a multinational, what the biggest challenges are in this scenario, what services are offered and much more!
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How can an accounting firm help your company?
As we already know, the day-to-day running of a multinational requires extra care, as it involves taxes, rules and regulations from many different countries. Unlike a national company, the task of managing accounting for companies of this size can be a little more difficult. In this sense, hiring outsourced accounting services is a great way to have more peace of mind in the short, medium and long term.
But how can outsourcing this service help your company?
Management accounting for multinationals
Management accounting is a fundamental tool for any company, especially multinationals. It is an area that integrates a compilation of internal and external information so that managers can improve their decision-making in a business. Everything is designed so that you can focus calmly and confidently on your strategy, knowing how to reduce costs, which fronts to invest in and, above all, how to manage the company.
In other words, management accounting is a method of techniques that measures and examines both financial and accounting information. From this, it is possible to broader planning and control in business management and, consequently, allocate resources in the best way. It goes beyond and complements traditional accounting.
In this sense, the accountant in charge uses spreadsheets, reports and other management tools, making it easier to see the current outlook for what the company is already doing and opportunities that can be seized. Therefore, the entrepreneur is aware, for example, of costs and budgets, the goals that must be achieved in the short and long term and other elements that can ensure the health of the business.
Therefore, when hiring a accounting office for multinationals, this model offers quick action plans in case of emergency. Proof of this is the greater stability it brings in unfavorable economic and even political situations.
Once management accounting has been applied, the entrepreneur will be able to find out, based on data, the best choices to achieve the most satisfactory results. Meanwhile, in the midst of this process, there will be active action on various optimization fronts.
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Some examples:
- Analysis of costs and budgets;
- Reformulation of logistics;
- Excellent service, focused on the user experience;
- More effective management;
- Proper allocation of resources;
- Panoramic financial control;
- Production line cost management;
- Growth in the profitability percentage;
- Constant monitoring of ROI;
- Closer and more assertive communications between departments, etc.
Within this context, management accounting and the accountant himself have become very important factors in decision-making processes. Whereas before accounting firms for multinationals were restricted to financial and accounting demands, now they have an even closer role to play in company management.
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Learn about other services offered by accounting for multinationals
As we have seen, management accounting is one of the main services offered by an accounting firm for multinationals. It's an area that really stands out in the market. However, on the other hand, there are also other points of attention within the company - essential services for everything to run smoothly.
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Reduce the charges paid and still comply with tax regulations?
Advice on tax planning from a reliable accountant who understands all the details of tax legislation can help with this. It also makes it possible to reduce tax risks and identify opportunities.
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Labor Advice
This is one of the most common reasons for a company, whether multinational or not, to look for an accounting firm. Their job is to ensure that all payments are made correctly and that regulations are respectedThis will avoid possible legal problems in the future. Hiring this service helps with the following tasks:
- Checking and issuing employee payslips;
- Preparation of reports on payroll data for the labor tax authorities;
- Issue of INSS, FGTS and Withholding Income Tax (IRRF) forms;
- Management of admission and dismissal documents, etc.
- Processing Payroll (including 13th salary and vacation pay).
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Hiring and firing employees
From hiring to terminating employees, the accountant is the professional who bridges the gap between company and person in every bureaucratic task. We can include payroll processing in this. As such, this service is This is essential at times such as the signing of work cards and termination of employment.
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Accounting audit
It represents one of the most valuable accounting resources for companiesespecially when there is a greater concern with compliance. The audit goes through the entire financial landscape with a fine-tooth comb, and can point out irregularities, probable management fraud and other management failures.
This inspection can happen sporadically, but it can also be constant, routine. With this analysis, financial data is thoroughly analyzed in order to ensure greater compliance with current laws. In this sense, accounting documents such as cash flow and balance sheets are examined through this service.
Issuing documents for participation in tenders
The accountant plays a purely strategic role when faced with clients who are taking part in tenders. In this service, they are the facilitating channel between the company and the volume of documents that need to be sent. In other words, having an accounting firm for this purpose saves time. After all, the documents are usually sent in person or even by post.
One of the densest stages of this work is the issuing of Certificates of Good Standing, but when done correctly, it helps the business to win potential tenders. This adds credibility to the company's image, but also to the accountant's CV.
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Delivery of accessory obligations
It's a very bureaucratic activity, as the complexity of the Brazilian tax system brings with it a number of legal requirements. For this reason, it is one of the services most sought after by companies.
But which items make up the delivery of ancillary obligations? See below!
- Withholding Tax Statement: information on payments and receipts with income tax withheld;
- Annual Social Information Report (RAIS): payroll information.
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Bookkeeping
Taking care of bookkeeping is one of the greatest responsibilities in accounting. It is an activity that works with the company's fiscal books, observing every financial movement made, controlling what is essential and entering information into statements and other documents. It therefore covers a number of obligations, such as
- Balance sheet;
- Bank reconciliation;
- Statement of Income for the Year - DRE;
- Tax assessment records;
- Among others.
When it comes to bookkeeping, the company's segment needs to be taken into account, especially in order to meet the specific legal requirements for each type of business. This is the accountant's role: he will analyze which requirements apply to a given situation. In addition, when tax forms such as ICMS and ISS are issued, the entrepreneur is up to date with the tax authorities.
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Strategic planning
Planning is essential for the success of any business model. It has a direct impact on the way we operate, build projections and set goals. Proof of this is that, once a year, the entrepreneur has to a time set aside to restructure their activities.
With the help of an accountant, the company can develop goals that are consistent with the reality it faces. At the same time, this professional will play a key role in stipulating action plans and clearly showing the likelihood of the strategic plan succeeding within 12 months.
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What are the main challenges of accounting for multinationals?
Brazilian tax legislation
For two reasons, the Brazilian tax system is the first challenge for an accounting firm for multinationals: its complexity and high taxation.
To get a more concrete idea of this, a survey carried out by the Organization for Economic Cooperation and Development (OECD) showed that we have the highest tax burden in Latin AmericaThis is 50% above the average in this region. In addition, the World Bank published a report which found that entrepreneurs in Brazil spend an average of 1958 hours per year to stay up to date with the tax authorities. That's the equivalent of almost 3 months. In other words, it's time that could be used for other purposes.
Faced with this reality, with countless tax acronyms and obligations, Hiring an accounting firm for multinationals is a smart choice. It's a way of guaranteeing more time to focus on growth strategies.
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Reports between headquarters and subsidiaries
In addition to complex tax legislation, there is a second challenge for multinationals: the exchange of information between headquarters and subsidiaries. It's more common than you might think to find companies in which the units don't have standardized action plans for specific situations. As a result, managers end up making completely different decisions for the same objective.
In this sense, a specialized professional can create operational process flows and implement them in the day-to-day running of the company. This makes it possible to map out each task, its execution and be more organized. A tactic that can be adapted to the specificities of each country in which the business is present.
So, in that case, the accountant calibrates the dialog between headquarters and subsidiariesand a more efficient internal communication system.
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Post Covid-19 world
In 2020, with the outbreak of the new coronavirus pandemic, multinationals were forced to take on new behaviors such as putting employees in the home office, analyzing and cutting costs and having an even closer relationship with their customers, in line with the new reality. Accounting was no different.
In order to adapt more quickly to the new normal, a growing number of companies are looking to outsource their accounting services. On the other hand, other businesses have kept their accounting operations in-house. Therefore, in the post Covid-19 world, those who have not yet adapted will need to take the necessary steps to avoid falling behind their competitors.
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Modernization with management software
In the context of the digital transformation, integrated management systems specialized - ERPs - have been gaining more and more ground in accounting. So much so that the main Brazilian tax authorities are already using reporting software. Automation has therefore become an ally in everyday life, reducing hours of manual labor and improving the management of legal compliance.
So when it comes to technology, the main challenge for multinationals is to start digitizing their processes, if they haven't already done so. Or, in other cases, to improve the use of this type of tool in the company's routine.
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Is your company ready to move offices?
At first, it's normal for employees and company leaders to be reluctant to change. However, in order to meet expectations and comply with the tax obligations of a multinational, it is essential to migrate to a specialized office.
But how identify the signs that your company is ready to change?
You can pay attention to a few points:
- Service that leaves something to be desired;
- Poor communication;
- Lack of up-to-date knowledge of the latest legislation;
- Missed deadlines;
- Almost non-existent proactivity;
- Use of outdated tools.
So if you're not happy with your current account, it's time to change partners. Although it sounds like a big deal, exchange counter is very simple! First, request cancellation of services by e-mail. Remember that it's important to enter the company's details and the date the contract ends.
Then ask for all the registration, accounting, tax and personal information back. Another request that should be made is a report showing all debts with municipal, state and federal agencies.
At the same time, signing a transfer of technical responsibility agreement helps to give you peace of mind in the procedures involved in this migration. Sometimes, almost always, the offices themselves already provide this document.
It is worth noting that the current accountant will have up to 30 days to adjust the demands related to the end of the contract.
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Conclusion
See how easy it is to make sure your company is ready? And how quickly change comes?
Your business only stands to gain by migrating to an accounting firm for multinationals.
Running a multinational company and dealing internally with tax information from different countries can be very stressful. Therefore, taking on this task can be detrimental to time management, reduce productivity and increase costs, as well as being a burden for your team.
If you need to rely on experienced accounting advice, capable of providing the best strategies for your company to improve its financial performance, get to know CLM Controller's solutions now.
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