If you operate a business that involves international financial transactions, you’re probably aware of the challenges this can present to small enterprises. While bigger companies can effectively mitigate their currency risks, smaller businesses often struggle to manage foreign exchange, especially when dealing with single-time contracts.
The instability of foreign exchange markets makes this problem even more complex. For instance, currently, one US dollar is approximately three quarters of a Euro, but this rate has fluctuated over the past year between 82 and 67 cents – an approximate change of 23% within just a few months.
While such unpredictability can sometimes work to your advantage, it can also be detrimental. International business transactions should not be left to chance, similar to a gamble in a casino! Even a slight variation can obliterate any profit margin if you aren’t prepared or haven’t set up a systematic forward agreement with suppliers or customers.
Resolving this issue isn’t straightforward, but hedging is usually a more prudent approach as it enables you to plan. If your company needs to transact up to £1million or less in foreign exchange annually, then a platform like HiFX international payment system provides a cost-effective solution.
Companies like HiFX can offer better buy/sell rates on international currencies due to their significant investment in technology that facilitates online trading. This high volume of business aids in reducing costs and transferring the benefit to customers, thereby enhancing competitiveness and attracting more business.
Furthermore, such services automate notifications for when currencies hit your ideal buy or sell rates and aid in planning deals in advance. Plus, with easy online access, you’re empowered to make quick decisions, anytime, anywhere. From SmartAsset.com.
