Globalization: Going Global And Managing Your Accounting As An Ecommerce Business

Having a borderless business is a sign of growth and success.

But it doesn’t come without fine-tuning logistical details along the way.

There’s a myriad of areas to consider to ensure the successful expansion of your borderless business.

And with fintech platforms on the rise, globalization is transforming the way businesses move and manage their money on an international scale.

Going global is exciting, but only if your accounting is in line.

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What Is Globalization?

Globalization is a term used to describe the worldwide interdependence of people, culture, and economies through money, technology, the trading of goods and services, and more.

Countries develop partnerships with other nations to develop stronger connections, fuel their globalization, and extend their economic reach.

These are likely your goals if expanding abroad is on the horizon for you.

Why Is Global Business Expansion On The Rise?

International trade has rebranded the term “globalization” due to the rapid growth of technology and rise in cross-border ecommerce selling.

And global supply chains are only becoming more vast.

Currently, 80% of world trade is fueled by supply chains dominated by multinational corporations.

So, if you’re looking to grow your ecommerce business, it’s in your best interest to widen your trade scale by going global.

Here are a couple of the biggest reasons why global expansion is on the rise:

The technology era

The digital revolution has completely transformed the way business is carried out.

A physical presence is no longer required in the countries you choose to expand to. And anyone can become your customer if they have access to the internet.

Going global is also no longer exclusive to large corporate brands that can afford to take on the challenges. The doors are now fully open for small- and medium-sized businesses (SMBs) to sell their goods and services online.

The gig economy

The free market system is packed full of gigs, freelance work, and other temporary positions.

As a result, hiring independent workers is now more common than ever. Our remote economy also plays a role in the availability of skilled, independent, short-term contract employees.

Companies can easily hire remote, foreign, independent workers to complete projects rather than bringing on full-time employees. This saves SMBs substantial money in terms of personnel taxes and other overhead costs.

What Does This Mean For SMBs And Accounting?

The number of small businesses in the US is reported to be around six million.

In the past, large corporate brands were the predominant entities going global and creating momentum in the international economy. Now, SMBs are the main force behind global business.

However, there are some challenges that SMBs face when selling in a foreign market:

• Initial investment costs

• Office costs (i.e., rent)

• Business tax logistics

• Marketing expenses

Hiring an accountant is a great resource for SMBs to manage their expenses.

Accountants can help SMBs determine how to pay globally distributed teams, manage the sending and receiving of payouts, taxes, and any other relevant fees involved with being a borderless business.

With some dedication and careful planning, SMBs can absolutely take on the challenge of global expansion.

Read more: 15 signs you should switch to an online business account.

What Are The International Financial Reporting Standards (IFRS) And Why Do They Matter?

The IFRS are a set of principles issued by the International Accounting Standards Board (IASB), an independent London-based international standard-setting entity.

These standards are a set of accounting rules that most public companies are required to follow regardless of their size or location.

They’re intended to bring consistency, transparency, and integrity to record keeping and account reporting practices so that business finances remain as globally comparable as possible.

But standards such as IFRS can often be hard for SMB financial teams to tackle.

So hiring an accountant, or using a fintech accounting platform, is usually the smartest move to keep your company compliant with accounting principles.

Read more: Nine top trends in international accounting for 2022.

How Fintech Platforms Help Facilitate Borderless Businesses

Becoming a borderless business might initially be a daunting task in terms of managing ecommerce finances across multiple markets.

However, global fintech platforms such as Airwallex and A2X remove the complexities.

A2X is an accounting connector app that makes your business finances easier than ever. They create tidy summaries that accurately reflect the payouts in your bank account, making it easy for you to track and manage your transactions.

Airwallex offers global business accounts in multiple currencies to make your payouts as smooth as possible with multi-currency payment gateways.

Take companies such as DevsData, for example.

Airwallex helped DevsData expand to the UK by giving overseas customers and suppliers more options for payment, while also avoiding forced currency conversions. Our UK Growth Guide explores the many facets of expanding to the UK.

Read more: How to set up business operations in the UK.

Contact Airwallex To Become A Borderless Business

Many SMBs rely on Airwallex to help with their global expansion.

Our myriad of tools include free global business accounts, borderless cards, and payments links to help companies better serve their clients and manage their finances.

If you’re ready to expand and want to avoid international fees and steep overhead costs, sign up with Airwallex today.