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When a company sets its sights on international expansion, the finance department assumes pivotal responsibilities. The CFO Barometer reveals that the finance function stays vigilant throughout this process. It evaluates the financial implications of various issues and validates the complexity involved in crossing borders is not a strghtforward task. Synchronized processes, digital collaboration tools, and an emphasis on efficiency improvement are crucial factors to consider.
CFO Barometer
Without International Expansion Strategy, No Strategy without Finance
90 of CFOs interviewed confirm their companies operate internationally, with product exports being of paramount importance. Once internal markets saturate, the eyes naturally turn towards international opportunities.
In a corporate setting, the finance department is always pivotal in performance measurement and risk management as well as answering critical questions about return on investment, all ming for financial returns that ensure a green light. The strategic vision remns at the forefront while finance provides significant input into decision-making processes.
International expansion presents numerous challenges ranging from cash pooling to due diligence audits:
Companies seeking acquisitions or funding opportunities for investments opt for cash pooling structures, where money is transferred from foreign subsidiaries to the Belgian mn account for smooth management. This approach maximizes bank rates and allows for efficient release of funds.
Post-acquisition financial integration demands adequate resources to enhance acquired value; inadequate involvement in people and resources could risk disrespecting local customs, leading to a potential exodus of employees.
Ensuring local business line support becomes crucial: Is there sufficient IT backing locally? How can corporate culture be mntned? How do local staff interact with customers? Careful attention to these aspects ensures new or existing customer loyalty.
Finance remns the bridge connecting management with company assets and is pivotal in due diligence processes. It supports local business lines, ensuring that necessary IT support exists locally, preserving cultural norms are respected, and staff members engage effectively with clients.
Efficiency gns also play out in personnel responsibilities:
Following the 2010 financial crisis, many firms re-evaluated income versus expenses, scrutinizing products and services. Unfortunately, this led to reductions in some departments through layoffs.
Presently, as growth returns after a decade, more administration support and expanded customer service are required. Digitalization ensures these tasks can be handled by the same number of employees, thanks to increased efficiency brought about by technology.
Growth does not necessitate hiring new staff; instead, tasks can be reallocated or automated through Robotics Process Automation RPA. Fear of automation might mislead as RPA is used for standard processes that code entire workflows. Employees take on more advanced roles while technology streamlines work and creates opportunities.
A robust IT infrastructure typically scales with the growth of a company. Functional cookies optimize user experience, while performance cookies measure site efficiency to enhance service delivery. MarketingTargeting cookies tlor marketing campgns based on individual preferences.
The finance department's role in international expansion becomes even more significant:
Ludovic Depezze
EY Belgium Financial Accounting Advisory Services Partner
An individual passionate about achieving a perfect work-life balance by enjoying activities that include 8 days each week: balancing professional tasks with family, sports, and leisure pursuits.
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CFO Barometer: International Expansion Finance Role Strategic Vision with Financial Input International Challenges in Due Diligence Digitalization for Efficiency Gains Automation vs. Human Resources Growth IT Infrastructure Scaling for Company Expansion