Japanese businesses operating in the United States face many challenges common to operating in a foreign environment, such as a lack of familiarity with local regulatory requirements, inexperience with local business customs and practices, and the need to adapt management practices to match the local market. These challenges can be especially formidable when a Japanese company first begins operating in the United States or when, for example, there is a period of management transition at a U.S. subsidiary. At such times, certain key vendor relationships provide critical support to assist the Japanese business in successfully navigating the challenges of operating in a foreign market. One of these key relationships is the public accounting firm engaged to provide professional tax, accounting, and general business services.
This article provides insight on critical factors for Japanese businesses to consider when selecting a public accounting firm.
The first factor is location. It can be tempting to simply search for a firm that has native Japanese speaking professionals. Depending on where the Japanese business is located, this may result in engaging a service provider that does not have a presence in the local market where the business is located. Engaging a local service provider helps ensure the accounting firm has sufficient familiarity and knowledge of local tax and related regulatory requirements to adequately serve the business. In addition, a local firm may be more accessible and provide more general business support. If not able to find a local service provider with the capacity or scope to fully serve your business, it may still be advantageous to engage a local firm for specific relevant services while engaging a more regional or national firm to cover the gaps. This strategy can also help to keep professional fees lower than would be the case if you engage a larger regional or national firm for all professional accounting services.
A second critical factor is experience working with foreign-owned companies. Such businesses have distinct internal reporting and compliance requirements. These requirements exist in addition to whatever local reporting and compliance requirements may exist. A service provider with experience working with international subsidiaries should be better positioned to support the Japanese subsidiary.
A third critical factor would be the experience of the accounting services provider with Japanese businesses. Familiarity with Japanese business practices and customs enable the accounting firm to be a link between Japanese management and local business customs and practices. This can be very valuable to the Japanese business. In addition, the accounting firm may be able to support special requirements that may apply, such as J-SOX compliance and reporting.
Finally, a Japanese business starting up in the United States can frequently benefit from outsourcing some or all of its accounting function with a local service provider. Outsourcing may provide cost savings when compared to the salary and benefits commensurate with experience for full-time accounting hires. In addition, outsourcing can provide Japanese management with direct access to a broader range of knowledge and expertise than would be possible if making a single hire.
Are you seeking a professional accounting services provider for your Japanese business? XPECT can help. Our Japanese Business Services are designed to support the unique and specific needs of Japanese subsidiaries operating in the United States. XPECT is focused on helping businesses optimize business strategy, enhance operational effectiveness, and successfully leverage accounting as a strategic tool, so that business leaders can focus on the strategic aspects of growing the business and achieving business goals.