Increasing Financial Regulatory Demands Pose Challenges in Expanding Overseas: Basware Study

Over half (56%) of companies surveyed are unable to expand overseas due to missed invoicing or tax compliance deadlines, according to Basware’s recent report, conducted by Financial Times Longitude.

What’s more, increasing financial regulatory demands combined with fragmented internal systems are creating a “compliance breaking point,” preventing businesses from reaching their full global potential.

“If you can’t be compliant, you can’t grow. Businesses are losing out on millions in potential revenue simply because their systems can’t keep up with global tax and invoicing demands. Most compliance challenges aren’t caused by misconduct, they stem from controllable technical issues, like manual invoices and unstructured PDFs,” says Markus Hornburg, head of compliance at Basware. “CFOs face growing risks, from fines to lost revenue and strained partner relationships. AI-driven automation, supported by strong invoice practices, gives finance teams the ability to process invoices accurately, streamline audits, and stay ahead of changing compliance requirements, turning compliance from a burden into a strategic advantage.”

Key takeaways:

·        More than one-third (36%) of companies have incurred fines by submitting incorrect tax audits, highlighting how widespread tax compliance failures are and why businesses risk being held back on the global stage.

·        Nearly four in 10 companies (39%) have experienced invoice rejections due to tax or invoicing compliance errors. As international finance and tax regulations become more complex, the financial and reputational costs of falling short continue to escalate.

·        Companies that fail to meet local finance and tax regulations risk delayed shipments, rejected invoices, and strained partner relationships.

·        Basware's analysis of 272 million invoices last year revealed that 57% still arrive as PDFs or paper documents rather than compliant e-invoicing formats. This represents $783 billion worth of non-compliant invoices flowing through global businesses.

·        While finance leaders clearly recognize the risks, many admit they lack the visibility and resources required to act effectively. The report found that 91% of CFOs believe limited visibility into compliance processes represents a major operational risk. Meanwhile, one-third (32%) of organizations frequently breach financial compliance by submitting incorrect tax audits, revealing deep structural weaknesses in financial oversight.

·        Only 29% have established comprehensive platforms to manage compliance effectively, while just 11% have cross-functional teams due to constraints in budget and tooling.

·        Among organizations with embedded compliance systems, 83% report they rarely receive fines and consistently outperform peers in revenue and profitability. 92% of finance leaders plan to establish cross-functional teams, empowered by C-suite leadership, to manage tax and compliance more holistically.