A priority for businesses is to maximise cash flow, for those businesses with exposure to currency movements here are some important strategies that can help with the bottom line:
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Currency risk management: Establish a comprehensive currency risk management policy that identifies, measures, and mitigates exposure to currency movements. This can include outlining procedures for regular reviews and updates to the policy, setting risk tolerance limits, and defining roles and responsibilities within the organization.
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Currency forecasting: Monitor and analyze currency market trends and economic indicators to develop accurate forecasts of future currency movements. This will help your business make informed decisions regarding currency exposure and hedging strategies.
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Diversification: Diversify your sources of revenue, suppliers, and investments across various currencies and regions to reduce the impact of currency fluctuations on cash flow.
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Invoicing in stable currencies: Invoice customers in stable currencies, such as the U.S. Dollar or Euro, to minimize the impact of currency fluctuations on your cash flow.
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Natural hedging: Align the currency of your revenue streams with the currency of your expenses, which can offset the effects of currency fluctuations without the need for financial hedging instruments.
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Financial hedging: Utilize financial hedging instruments, such as forward contracts, futures contracts, options, or swaps, to lock in favorable exchange rates and reduce the impact of currency fluctuations on cash flow.
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Cash management: Maintain an appropriate level of cash reserves in multiple currencies to ensure sufficient liquidity and minimize currency conversion costs.
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Regular monitoring: Monitor your currency exposures and hedging strategies regularly, adjusting them as necessary based on changes in the currency markets or your business’s risk tolerance.
Using your regular bank to make international transfers and payments can be very expensive – often 5% to 6% worse than using a foreign exchange specialist to send money abroad or pay a foreign invoice as shown in the below table:
Business Transfers
Sending money abroad can be an expensive for businesses small and large, more so if you aren’t even aware of all the hidden fees.
Money transfer companies and banks profit by charging you fees and a normally hidden margin on the exchange rate.
We make it easy to save money by making these fees and exchange rates easier to see and compare rates from trusted, regulated money transfer specialists to use when you need to send money abroad. With the below foreign transfer comparison table, you can quickly find the best way to send money internationally.
