One of the biggest threats to the profit margins of any business that makes or receives international payments is the volatile nature of the currency markets. So here’s some quick, simple and easy to implement processes that you can put in place to increase your bottom line.
Top 5 Tips to reduce risk and save money
- Batch pay numerous international invoices in the same currency and save money on the economies of scale a larger currency purchase provides.
- For the utmost protection against risk look to use a forward contract which avoids you losing money if the rate moves between when you pay or receive payment of an invoice that has a payment term date set in the future. Put simply you take advantage of a favourable exchange rate one day and fix a forward payment date to protect the business from exchange rate volatility.
- Set up part payments of an invoice in one simple step rather than having to buy currency at different rates each time you need to settle a percentage of the invoice.
- Always check whoever you use to make onward payments has the ability to use local payment methods that avoid paying further receiving bank charges in the country where your beneficiary is based.
- Ensure whoever you use provides a Sterling cost confirmation for all international payments to give your business the finite cost of your international payments.
How can you set up these processes?
There are numerous international payment providers out there but often their services stop at simply paying currency invoices with no functionality to receive payments and no forward, part, batch payment options to protect against currency risk and save you money. Proficient management of international payments is about more than just the exchange rate you get. That is why the NEW SAT FX Online add-on for Xero users has been developed; so you can benefit from a range of solutions that reduce risk, cost and time spent on foreign currency allowing you to get on with growing your business.
If you spend time setting this add-on up how else can your business benefit?
Efficiency. Time efficiencies via the nature of the solutions provided by this add-on such as batch and part payments lead to streamlined accounting processes. It seamlessly slots in to your Xero system and reconciles back to the accounts you already have set up. Plus, provides an instant overview of the cost of currency to your business.
Why should you give NEW SAT FX Online a go?
Because it’s been built by people like you. In a unique approach SAT FX Online consulted Xero users every step of the way in the development process. The improvements made to SAT FX Online work twice as hard and solve ‘real life’ business problems.
How do you try it out?
Go to www.satfxonline.co.uk to sign up and start using the add-on or if you want to find out more or have any questions on best practice to protect your business from currency risk speak to Adam Cotton on 01491 577 550 or email xero@satworldwide.co.uk
This blog post originally appeared on our old website.