Tackling Fraud: Keep in Control and Stay on the Look Out When Venturing into Foreign Markets
It is estimated that one in five smaller UK businesses experience fraud, resulting in a total loss of almost £19bn a year, equivalent to 1.4 per cent of combined turnover. Therefore, whichever way you choose to define your business’ selling model for overseas – be it through a distributor, sales office, B2B etc. – it is imperative to assess potential risks of fraud and conduct due diligence ahead of the deal.
When expanding into a fresh market, you will have to adapt to the local way of doing business. It is similar to travelling abroad; if you don’t adjust to the local customs and norms, you will struggle to develop relationships – business or otherwise. And, like anywhere else in the world, there are always parties ready to take advantage of such ignorance. However, being business savvy and having the correct procedures in place, such as those recommended by the Fraud Advisory Panel (FAP), will help you mitigate risks, which is especially important when trading in markets where English is not the native language.
The latest fact sheet available, free of charge, from the FAP website provides tips on how to avoid becoming a victim of supplier and outsourcing fraud. It argues that companies should put internal controls and procedures in place throughout the procurement cycle, for example when inviting tenders, negotiating terms, awarding contracts and evaluating and auditing suppliers.
However, firms dealing with suppliers based in non-English speaking countries should, for added security, implement these procedures in both the company’s native language (so, for most of us on Open to Export, English) as well as the language of their target market.
It may seem an arduous task, but the advantages are clear. If your company can demonstrate a grasp for the costumer’s language, it will instil a sense of legitimacy and long-term commitment within the new market. Translating the necessary documents in the early stages of the procurement cycle will also establish a mutual understanding from the outset and help alleviate the risk of going into business with potentially fraudulent distributors, who may fail to disclose accurate pricing on contracts or dishonestly charge at a price not contractually agreed.
Should your business fall victim to fraud, the impact can range from lost opportunities to complete business failure. Having met many talented business leaders who have fallen prey to scams that vary in sophisticated and involved ‘customers’ based overseas, it is clear that they have been deterred from engaging in further trade. This is a double whammy and need not be the case. Doing your research is essential and implementing a solid language strategy will work to your advantage. Some translation agencies have an international network of trusted, professional contacts that can help you when evaluating your export venture, providing you with local knowledge to give you the upper hand over distributors and, most importantly, keep you in control of proceedings.
At Today Translations, we specialize in language strategy for companies seeking to export to foreign markets, giving them local insight and the confidence that we are all speaking the same language where trade is concerned. Our aim is simple: To help businesses do business better.