Globalization and Mobilization It is easier than ever for companies to do business globally whether it be selling to customers abroad, hiring contractors overseas, or fully expanding offices and employing a workforce in a foreign country. While there are many opportunities abroad, there is also a land filled with legal and compliance ambiguity, as well as other challenges as it relates to foreign currency and exchange rates...
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owever, one thing that can stay somewhat consistent, thanks to Xero, is the back office accounting. Multi-currency features allow businesses to easily reconcile and report on financial activity from one place. Localized Xero features and add-on App Partners allow businesses to adopt foreign local best practices easier and to overcome foreign tax and bureaucracy that could otherwise put a serious damper on foreign growth efforts. The US is an example of a huge marketplace opportunity with many challenges. Below are just a few examples of common US expansion challenges and mobile solutions to solve them. Challenges and Mobile Solutions to Consider When Expanding to the US Who writes checks anymore? Many business owners are bewildered by the fact that their vendors in the US expect physical checks to be written and mailed to their office. However, if they want to pay their landlord or larger supplier in the US, chances are they will have to write a check, or a few checks every month. Two common solutions to overcome 24 / Issue 12
this are: • Online banking systems in the US have mobile apps and great online bill pay systems where they will cut checks for you and will sync via Xero bank feeds. • A Xero add-on called Bill.com can be used for creating an automated accounts payable process and initiating check payment from their mobile app. Wait a minute, I have to receive checks too? Larger customers may only be willing to pay a business by check, which can create quite the predicament if the business doesn’t plan to have an office or feet on the ground in the US EarthClass Mail is an affordable option to allow for virtual mailing services and check depositing. Businesses can receive checks and other mail, allowing the owner and advisors to access their mail from anywhere, run the back office, stay in compliance, and reconcile deposits in Xero. When and how to employ people in the US? Perhaps one of the most complex
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Bruce Phillips, Founder/CEO, HPC Bruce Phillips is a seasoned CPA and passionate advocate for cloud technology. Having served as a CFO and COO of tech startups, he was an early adopter of cloud technology for accounting and other businesses. Originally from Rhode Island, he now calls Atlanta, Georgia home. When he’s not assisting clients with their cloud technology needs or providing accounting advice, Bruce is a wine enthusiast, active tennis player and passionate traveler.
topics in the US is Nexus and state and local compliance rules. This significantly impacts the way a foreign or new US business will hire and pay their people. Every state has their own rules and processes for obtaining local payroll tax ID numbers, separate from the IRS FEIN number. This can push back hire dates as much as 4-6 weeks in a new state. Every state also has it’s own opinion in terms of what a contractor and employee is in their state. A business owner does not have the option of paying someone as a contractor and filing a year end 1099 form for them, or putting that person through the full gambit of payroll with tax withholdings and year end W2 forms. The US also has specific requirements for foreign employees based in countries outside the US, usually resulting in the need for form W8-BEN. This is a very complex topic, but complying is not impossible. Outsourcing payroll compliance is one of the first things to consider. • Xero does have a Do-It-Yourself payroll option. • Gusto payroll is a cost effective outsourced payroll provider that
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