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Paid Advertisement Boundless Globalization A CFO’s Guide to Realizing International Ambitions s firms throughout the U.S. undertake growth initiatives such as introducing new products, entering new markets, and acquiring other companies, they’re looking to their CFOs for much more than financial leadership. They’re depending on them to oversee a wide range of new areas and play a key role in setting corporate direction and identity. “The CFO has evolved from this accounting function—the most senior accountant in a company—to being this strategic leader who, by the way, is also involved in finance,” says Pete Dontas, Bank of America Merrill Lynch market executive for New Jersey. One area in particular associated with an aggressive growth enterprise is globalization. More than half of U.S.-headquartered, mid-size companies are now conducting business outside the country’s borders, and many smaller firms are finding opportunities overseas, too. In a Bank of America Merrill Lynch survey, a large majority—67 percent—of CFOs predicting above-average sales growth for 2015 expected to see increases from international sales. But global strategies bring new challenges. And in fast-growing organizations, it’s typically up to the CFO to find a way to overcome them. Key issues include foreign exchange, repatriation of revenue, unfamiliar laws and customs, the strengthening dollar and earnings volatility. “It falls on the CFO to set up relationships with facilitators and find the right intermediaries to do business there,” says Dontas. HIGH-STAKES TERRITORY It’s not hard to see why globalization has taken hold: The growth possibilities in developing markets can be hard to match elsewhere. For example, China’s economy is likely to expand by more than 7 percent. While the U.S. economy grows at a projected rate closer to 3 percent. International acquisitions can be a quick way to ramp up a company’s presence and sales in new markets. In tough-to-crack regions, they may be the only viable way in. In this high-stakes game, CFOs must see the firm through funding the expansion, operating profitably, complying with local laws and, ultimately, accessing the money it makes. It’s easy to overlook a tax issue or other matter that can sink a company’s plans. To smooth a firm’s entry into global markets, an experienced global bank can connect the CFO with experts and other managers who have been where they are. For a given country or region, a banker can work with the CFO to create a suitable treasury management structure. “It’s a strength of ours,” says Dontas. “We have people on the ground in the countries where they want to do business, and we’re doing business there ourselves.” Factors to consider include the company’s objectives and need for liquidity as well as local regulations and tax implications. “Our CashPro ® Online treasury management system is a tool that can help rapidly expanding companies manage their cash and information flows,” Dontas says. The bank also helps firms understand issues such as currency, fraud and regulatory risk. LESSONS FROM THE TRENCHES Language and culture differences can also be major stumbling blocks. For example, handling business cards the wrong way can signal a lack of respect in China and Japan. It’s crucial in both countries to give and receive cards with both hands and to review cards carefully before putting them away—preferably in a nice case or portfolio, not your pocket. The finer points can take a lifetime to master. Few CFOs have the time to understand every nuance of a new business environment, especially when their growth strategy might involve multiple countries. Bank of America Merrill Lynch relies on their experience with clients from nearly every industry, that have been through the growing pains of international expansion, to aid other clients. Their from-the-trenches advice can complement that of lawyers, accountants and consultants. Firms can also measure their performance against vast amounts of benchmarking data through a Bank of America Merrill Lynch tool called PeerProfiler ® . “Bankers don’t just provide access to capital or products or services,” Dontas says. “We provide access to people—peer-to-peer insight and experience.” Ultimately, the CFO’s role in globalization is the same as in other areas: Support the organization’s strategy while managing risk. “People in hyper-growth mode are quickly wearing many different hats,” says Dontas. “I call globalization a team sport. You not only need support and data, but to hear about different experiences.” For more on how your business can expand internationally and adapt to the demands of rapid growth, contact peter.a.dontas@baml.com. Peter Dontas Market Executive New Jersey Bank of America Merrill Lynch For marketing disclaimer, visit bankofamerica.com/disclaimer. ©2015 Bank of America Corporation 03-15-0594.A Helping you see global markets as more familiar than foreign. That’s the power of a local neighbor, connecting you with over 200 countries, multiple time zones and 140 currencies worldwide. baml.com/yourcorner far corners