How Financial Management Is Different for Multinational Corporations
Diane Kaern, former analytics and reporting manager for worldwide sales compensation at Hewlett-Packard, has won several awards for her professional achievements. Over the course of her career, Diane Kaern has proven her ability to streamline reporting processes and successfully manage finances for a number of multinational companies. While there are several benefits to expanding globally, multinational corporations often face many more financial risks than domestic ones, making the process of financial management a bit more complicated. While domestic companies only have to worry about one economic and legal structure, multinational enterprises must navigate through several different systems. One country may allow certain practices while another does not. Beyond that, different countries have different currencies, meaning multinational corporations must consider how exchange rates may change and affect money transfers and cash flow. Financial management of multinational corporations is also affected by the different governing licensing and tax structures imposed by various governments. Depending on the country where a company is conducting business, high levels of government bureaucracy and inefficiency can affect a corporation’s finances, and any political instability within a country may result in a halting of operations. Foreign banks also frequently have varying regulations that affect a multinational corporation’s ability to manage its money freely.