For over thirty years, Clayton & McKervey has helped foreign-owned companies start and manage subsidiaries in the US by providing a range of accounting, tax, and business services. To best serve these companies, our dedicated team of tax and accounting professionals sought out and invested in a range of new cloud accounting applications and are adapting them to fit the particular needs of the US subsidiary and its foreign parent company. Now more than ever in today’s world of virtual and remote management of a US investment, cloud accounting tools serve foreign-owned companies well.
Getting an especially great reaction from European companies that are establishing in the US, we have found that cloud accounting applications such as QuickBooks Online and Bill.com, when synchronized between applications and with bank accounts, form the foundation for the best practice to eliminate typical obstacles.
Seven Reasons Why You Should Consider Cloud Accounting
1. Remote Access
Cloud accounting applications provide a foreign parent visibility of the US subsidiary’s financial activity through remote and multiple user access to the applications. Their investment in the US subsidiary can be monitored from any location at any time through remote access. This is a substantial advantage over sending pdf, excel, or backup files between entities and time zones.
2. Real Time Accounting
Accounting entries made in cloud accounting applications update immediately for all users regardless of the time or location of the users. Customized dashboards make financial results that matter to each user available in real time. Instead of receiving reports once a month, the parent, the subsidiary, and accountants have access to accurate and timely information for managing and growing the business.
3. Customized Reporting
A US subsidiary with a foreign parent usually has very specific group reporting requirements to meet. A cloud accounting application such as Intacct has great capacity for multi-dimensional reporting allowing data to be “sliced & diced” easily to customize reporting for the different users in the US and at the foreign parent. An application such as Fathom can provide comprehensive options for management reporting including consolidation reports. A foreign -owned group of US companies can use this application to track and monitor the performance of the individual companies and the US group to which they belong, providing greater insight to management for the entire US operations.
4. Automated Transactional Reporting
Cloud accounting applications, such as Bill.com, automate the process for bill approval and payment. Management located around the globe has accessibility to review, approve, and pay bills on phones and tablets in a secure cloud environment. Bill.com also syncs all activity with other general ledger applications such as QuickBooks Online to reduce the processing time and steps to process bills for payment. Similar benefits can be achieved for time and expense reporting with an application such as Expensify.
5. Virtual Advisory Services
Cloud accounting applications are structured to automate repetitive transactional accounting activity. More time and attention can then be focused on virtual advisory services which add value to the growth of the business. Other benefits of cloud accounting applications mentioned above enhance the timeliness and effectiveness of virtual advisory services. Any size business at any growth phase can benefit from virtual advisory services when using cloud accounting applications.
Cloud accounting applications can have a lower total cost of ownership. The regular monthly subscription fee offsets the costs of additional infrastructure, staffing, and labor hours that traditional accounting software requires. Additionally, as a firm we can automate bookkeeping and pre-accounting tasks further through the use of Botkeeper to keep outsourced accounting costs lower and add more value to the time we spend with our clients.
Cloud providers maintain customer data behind additional layers of security such as 2-step authentication, IP address restrictions, encryption, and detailed access logs. Data is also backed up automatically and regularly as an additional safeguard.
Below are examples of how our international team has worked with clients using the cloud accounting application tools we offer. We hope these case studies are insightful.
Case Study #1
A European engineering services company with $1b global revenue came to us when they wanted to expand into the US. They needed very specific reporting for the parent company. In an Intacct demo, we were able to build the customized report that was available at the push of a button at any time and not just once a month.
This global company had other subsidiaries outside of the US who couldn’t provide the group controller with the specialized report needed. The group controller told us until we came up with this solution, he had to dig through the general ledger reports the other subsidiaries provided and manually pull the information needed. He went on to tell us that our reporting is the easiest, most accurate, and best of any of the subsidiaries around the world. He can access the detail anytime he wants – and on whatever device he has in his hands at the time.
We also helped them identify a cloud accounting time and expenses application so employees could enter their time and manage expense receipts electronically, including processing receipts by taking a picture of it with their phone.
Case Study #2
A leading manufacturer of 3D industrial printing systems is planning on aggressive growth and came to us when establishing their first subsidiary outside of Germany. Using a package of cloud accounting applications we met their need for a specific format for their group reporting and automated their bill payment process, allowing for easy approval and payment of expenses from phones or tablets. This is particularly beneficial when the company’s officers are traveling or located around the globe.
Our support extended beyond their accounting and reporting needs. While their facilities were being built out, we offered our resources so they could move forward with the necessary activities, such as preparing sales quotes and interviewing to fill key roles in the organization.
With our approach and our resources, we have been right there with them every step of the way, and with every issue they encountered. With growth, when a group ERP reporting system was needed, we assisted with the transition, adjusting and retaining the best combination of cloud accounting applications to complement the ERP system and processes.
If you are planning to start up in the US, we would be happy to answer your questions or assist with a needs analysis to determine what tools are appropriate to help you grow your business. For additional information call us at 248-208-8860 or click here to contact us. We look forward to speaking with you soon.