How to Manage Currency Risk in International Business
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Company growth can be defined in several ways: most obviously, it refers to increasing revenues as a result of being in business, but it can also mean growing in terms of the number of people it employs, how many clients or customers it has, or the number of offices or outlets it operates domestically and internationally.
Growth, however, can give rise to problems and risks: most notably the need for added resources to sustain it, and the increased costs that come with doing more business - particularly internationally.
More clients or customers means more support staff to service their needs; more offices or outlets means greater overheads from rent to bills - and increasing your geographical reach brings with it the costs of doing business abroad - from transfer fees to the risks associated with fluctuating exchange rates.
Tapping into overseas markets is a necessary step for any business looking to exploit their market to the full. Approached pragmatically, with a sound business plan and the right support, it’s not as daunting as it may first seem. Easy to overlook but important to help maximise profits and minimise costs, implementing a robust currency strategy is a crucial first step.
Unaware of the benefits of developing a currency strategy, many businesses make international payments through their bank, which can prove expensive. Relying on banks can leave you exposed to a raft of hidden fees – especially when transferring from one foreign currency to another where unfamiliar systems and levies are commonplace. Some banks even take a fee from both the sending and receiving accounts, effectively charging you twice if you’re transferring between your accounts. Alongside inflated exchange rates, costs can range from anywhere between 0.07-7% of each transaction.
Talk to the Experts
Clear Treasury specialises in providing businesses across industries with clarity on the tools available to mitigate their exposure to currency risk. When you become one of our valued clients you will be assigned a dedicated account manager. In addition to helping you benefit from quick, easy, and secure cross-border transfers, they can outline the tools available to help you mitigate the impact of currency risk on your international payments. What's more, we'll use our knowledge and experiene to help cut through the jargon. Open your free Clear Treasury account today for quick, secure and cost-effective international currency transfers.
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