In the business world, managing payments and transactions is a priority. Whether you’re a freelancer, self-employed professional or small business owner, it’s crucial to understand the best global invoicing practices. In this article, we’ll look at how to streamline payments, reduce risks and improve customer relations, all while minimising costs.
Understand International Regulations
Making payments on a global scale requires a comprehensive knowledge of the world’s banking regulations. Cross-border payments involve a web of regional regulations for know-your-client (KYC) requirements, anti-fraud measures, money laundering prevention and more. Companies can’t afford to break the law, as a single offence can lead to devastating fines, as well as irreparable reputational damage.
At this point, it’s a good idea to form a working knowledge of the global environment, or to seek professional guidance when needed. Establishing a dialogue with the local regulatory authority is also a valuable step.
Keep Up with Local Accounting Practices
Payment is only one side of the equation. When transacting with foreign businesses, companies must consider how money comes in and out of the country. Again, understanding the local regulations is paramount.
Some nations draw a hard line when it comes to payments and finance in general. It’s not uncommon for companies to come under heavy scrutiny if they don’t adhere to the local accounting guidelines. This can lead to serious difficulties, including high taxes and long-term compliance issues.
Choose the Right Payment Methods
With the foundations in place, companies can begin to identify the most appropriate payment methods. After all, different nations have different traditions in the corporate world itself.
When dealing with freelancers, small business owners or similar parties, money wire via banks is often the preferred option. International transfers take days or weeks to settle, however, as the payments are usually routed through intermediary banks in different countries.
Until recently, these were the only practical options for cross-border payments. These days, however, companies can choose from a spectrum of solutions, including e-wallets, digital platforms and even cryptocurrency.
Optimise Transaction Costs
Third-party options like these provide a lot of benefits. For one thing, they reduce the administrative burden for companies and their customers. What’s more, companies can save a significant portion of the transaction cost by shopping around and using a cost effective service.
There are two ways to approach this. First, it’s a good idea to compare prices across the most popular online payment providers. Second, it's worth considering the cost to value ratio. Aim for a payment system that doesn’t break the bank, but still meets all the necessary requirements.
Prioritise Security
As a general rule, companies must ensure that payment solutions are secure and reliable. To minimise risk, look for a payment provider that provides industry-standard data encryption and authentication protocols.
It’s also important to pay attention to the provider’s certification levels. Major players will offer both PCI-DSS and SARBOX certification, guaranteeing that they have passed stringent security tests. This means companies can have the peace of mind associated with safe, reliable transactions.
Keep it Personal
Last but not least, companies should also consider how they can add an extra personal touch when corresponding with customers.
When sending invoices, for instance, companies should look for a provider that goes beyond basic documentation. Many platforms allow for customisations in terms of fonts, logos and watermarks. That way, customers start to associating those materials with the company. It’s a simple yet effective way to build trust and recognition in what is essentially an impersonal medium.
Be Prepared for Anything
When transacting with foreign organisations, errors can occur for a variety of reasons. This can lead to nasty nightmares which become worse over time.
For this reason, companies should establish a framework for dealing with failed transactions. It’s best to draw up an EMP contingency plan, which specifies the exact steps to be taken in the event of any problems.
In addition, it’s good practice to provide contact information for all kinds of customer queries. This could include telephone numbers, email addresses, customer service helplines and other channels. That way, customers can reach out and get the help they need, while avoiding frustration and delays.
Conclusion
Accounting practices and administrative procedures are crucial for any company, but especially for those conducting business on a global scale. Without an understanding of the regulations, companies may find themselves in dire straits.
On the other hand, a well thought-out payment system can make global transactions a breeze. Companies that understand the needs of their customers, while also taking on board the local customs, will be better positioned to conduct successful business worldwide.
