Due to globalization, cross-border business operations are continuously growing. Accordingly, different service providers have to deal with customers from different countries and provide their services worldwide. This tendency also influences accounting companies. The article aims to discuss the importance of intercultural competence for accounting service providers.
Companies that specialize in providing accounting services are called accounting companies (Baltic Assist 2016). In order to provide integrated service solutions to their customers, accounting companies also cover a wide number of other financial administration services such as payroll, auditing, and consultancy services (Taloushallintoliitto 2018). Naturally, the range of services provided by accounting firms depends on the size and resources of any particular firm (Baltic Assist 2016).
Accounting is an important activity for every enterprise because it provides financial information that is used for economic decisions making (Atrill & McLaney 2011, 2-3). Moreover, accounting liabilities are regulated by the law (Leppiniemi & Kykkänen 2013, 18-19). But in spite of all mentioned above, accounting is not a core business activity for all enterprises and can be outsourced to accounting companies (1C 2018).
Accounting outsourcing becomes essential in the case when an entrepreneur decides to bring business operations to a foreign country. Accounting companies with their wide number of services that could be adjusted to certain customers’ needs become valuable business partners. They are able to compensate customers’ lack of legislation and taxation knowledge and take all responsibility for accounting on themselves. (1C 2018.)
Importance of intercultural competence
Intercultural service is a term used in the case when service providers and customers have different cultural backgrounds (Kenesei & Stier 2017, 307-308). People within one culture have common features such as values, behaviors, languages, symbols, and taboos. Representatives of any culture are unconsciously influenced by their own culture on an everyday basis. (Nieminen 2014, 31-32.)
Culture defines the way people perceive and deliver services as it is shown in Figure 1. Service quality criteria are also affected by culture. What is considered to be a good quality service in one culture does not necessarily apply to another culture. (Nieminen 2014, 31-32.) In other words, services implemented in the same way result in different levels of customers’ satisfaction depending on the culture of the customers (Kenesei & Stier 2017, 307-308).
FIGURE 1. Influence of culture on service perception (Nieminen 2014, 32)
In order to foresee expectations of foreign customers and decrease misunderstanding during interaction with them, service providers should develop intercultural competence. Intercultural competence defines an extension to which a person is respectful, opened and non-judgemental towards representatives of other cultures. Intercultural competence is an important quality for intercultural services providers because knowledge of other cultures enables best customer experience and minimize customers’ dissatisfaction. Intercultural competence should become a part of corporate culture and encourage and educate employees to work open-mindedly with customers from different cultures. (Kenesei & Stier 2017, 310.)
Cultural aspects in an accounting company
Influence of culture on customer experience was studied in the Thesis research of Karina Hagman (2018): “Accounting services for Russian entrepreneurs in Finland”. The qualitative research was implemented in order to study how to deliver exceptional accounting services to present and potential customers of the case company – Rantalainen Accounting Services Ltd. The case company is the third largest accounting services provider in Finland that offers its services to both Finnish and foreign customers. One of the target foreign customer groups of Rantalainen is Russians companies.
The research showed that Russian customers expect accounting service provider to be culturally competent. Such conclusion was made on the basis of customers’ expectations and requests for accounting services that were analyzed during the research. First of all, respondents were very concerned about service providers’ ability to implement accounting services in the Russian language. Most of the respondents have named the language factor as a highly important component that affects their satisfaction. (Hagman 2018.)
Also, Russian entrepreneurs expect accounting providers to completely understand the Russian culture and business environment. Russian customers know that the Finnish and the Russian way of doing business differ from each other, and they expect accounting service providers to recognize and respect these differences. Moreover, Russian customers want accounting companies to help them to develop their own intercultural competence towards Finnish culture and business. Respondents showed their interest in additional services such as consultancy about Finnish business culture, taxation, and legislation, help in networking, communication, and acquisition of potential customers and partners, and business-related translation services. (Hagman 2018.)
Accounting outsourcing is beneficial to foreign entrepreneurs but it also brings challenges to accounting companies. Success of intercultural customer services depends on the ability to understand foreign cultures and their representatives. It requires also multilingualism and readiness to recognize cultural dimensions without bias or generalization.
To develop intercultural competence, an accounting company needs to make it a part of its corporate culture and customer service strategy. Interculturally oriented corporate culture provides employees with necessary customer service education and tools. Intercultural customer strategy, in its turn promotes a better understanding of customers and their expectations. In summary, culture does matter for accounting companies and intercultural competence has to be integrated in their operations.
1C. 2018. Buchgalterskie uslugi: vigoda i riski dlja bisnessa. [Cited 4 May 2018]. Available at: https://www.regberry.ru/malyy-biznes/buhgalterskie-uslug
Atrill, P. & McLaney, E. 2011. Accounting and finance for non-specialists. 7th edition. Gosport: Ashford Colour Press Ltd.
Baltic Assist. 2016. How outsourcing of bookkeeping and accounting service works. [Cited 4 May 2018]. Available at: http://balticassist.com/how-outsourcing-of-bookkeeping-and-accounting-service-works/
Hagman, K. Accounting services for Russian customers in Finland: Case Company: Rantalainen Accounting Services ltd. [Online Document]. Bachelor’s thesis. Lahti University of Applied Sciences. [Cited 4 May 2018]. Available at: http://urn.fi/URN:NBN:fi:amk-201804255494
Kenesei, Z. & Stier, Z. 2016. Managing communication and cultural barriers in intercultural service encounters. Strategies from both sides of the counter. Journal of Vacation Marketing. [Electronic journal]. Vol. 23(4), 307-321. [Cited 4 May 2018]. Available at: https://doi.org/10.1108/13527600410797710
Leppiniemi, J. & Kykkänen, T. 2013. Kirjanpito, tilinpäätös ja tilinpäätöksen tulkinta. Helsinki: Sanoma Pro Oy.
Nieminen, M. 2014. Monikultturinen asiakastyö. Helsinki: Tietosanoma.
Taloushallintoliitto. 2018. Tilitoimiston palvelut. [Cited 4 May 2018]. Available at: https://taloushallintoliitto.fi/tilitoimistoasiointi/tilitoimiston-palvelut
About the authors
Karina Hagman has studied International Business at Lahti University of Applied Sciences and worked in the case company, Rantalainen Accounting Services Ltd, during the thesis research implementation.
Sirpa Varajärvi works as a Senior Lecturer at the Faculty of Business and Hospitality Management, Lahti University of Applied Sciences.
Illustration: https://pixabay.com/en/wood-wooden-desktop-diversity-love-3152940/ (CC0)
Reference to this publication
Hagman, K. & Varajärvi, S. 2018. DuuniExpo as a learning environment of human resource management. LAMK Pro. [Electronic magazine]. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2018/05/21/cultural-perspectives-in-accounting-services-does-intercultural-competence-matter