The challenge of minimising waste affects all businesses, but in light of the current global food crisis, waste in the food and drink industry is seen as a particular priority right now.
Phil McHugh, our Senior Market Analyst, shares his top tips for maximising the potential of your foreign exchange payments.
1. Don’t waste time monitoring markets for your target exchange rate
Markets move in unpredictable ways. The only way to keep on top of exchange rate movements is to watch them full time – an impossible task for any business owner.
Even if you somehow had the time and resources to watch currency charts all day long, you’d still be missing the full picture; markets move out of hours as well.
The process of monitoring exchange rates can easily be automated to prevent you wasting time and free you up to focus on more immediate tasks.
For starters, you can use rate alerts to target a specific exchange rate. By getting an instant update when the market moves to that level, you can organise transfers to capitalise on favourable conditions. But even these transfers can be automated so that you can send or repatriate funds without even having to think about it.
Meanwhile, a limit order is like a rate alert that automatically triggers a transfer when your target rate is hit. Set your payment amount and destination account and the payment is made automatically when the market rises or falls to the specified level.
2. Don’t gamble with your profits
A lot of businesses I work with have regular invoices to pay but are unable to budget for them effectively as using spot payments means costs fluctuate greatly from month to month.
Many SMEs struggle with the same issues because they aren’t aware that they could opt to fix an exchange rate using a forward contract.
A forward contract creates an agreement with your broker to buy currency at the current market rate up to twelve months in the future. It means you can benefit from a positive shift in exchange rates, lock in your costs, and minimise the risk of a sudden downturn.
Knowing the Sterling cost of your invoices up to a year in advance allows you to create more transparent cash flow projections and budget effectively. Free up cash to invest in your business by locking in exchange rates and making your overseas payments much more predictable.
3. Find a partner you can trust
A foreign exchange provider should do much more than just swap one currency for another. They are the experts in the field of overseas payments and should share their knowledge in order to help you make more informed decisions.
The level of service you receive is just as important as the exchange rate – time is money, and a leading broker should be able to save you both. To ensure the security of your funds they should also be accredited by the right bodies, like the Financial Conduct Authority (FCA).
On top of the bank-beating exchange rates offered by specialist currency brokers, you also get access to regular market updates that inform you of upcoming developments that are likely to impact exchange rates. With expert currency analysis and personalised guidance, you’ll be able to choose the right tools and payments strategy to achieve your goals.
Reclaim your time and control your costs
By using automation, risk management and choosing a currency provider who delivers on service as well as exchange rates, you can minimise the cost of your foreign exchange payments while freeing up time and resources.
The simple steps I have outlined have helped many businesses better protect their bottom line, increase cash flow visibility and focus on growth – get in touch if you want to find out more about how they can do the same for you.