As a small business owner you will know how important it is to have the right processes, infrastructure and key team members running the day-to-day operations. Running a business in the UK can be challenge enough, but when you have to pay international suppliers and staff it adds another element to the operations and admin for your team.
When it comes to international payments many opt to use the bank as it appears to be a ‘quick, safe and easy’ option, but you may end up with high rates and hidden fees.
Don’t be afraid of foreign exchange. Once you understand what to look for in a provider you will be able to use them to support the international growth of your business and will be able to pay suppliers and international staff and receive international currencies.
Here are my top tips to get the most from your international payments:
- Know the rate – Get a guaranteed exchange rate from your provider for the amount of foreign exchange you will be booking.
- Transfer fees – Providers may say that there is no fee to make a transfer but watch the exchange rate they offer – they have to make their money somewhere.
- Currencies – Ask questions and get advice about local currency rates and regulation that may impact the cost of the product or service you are transferring funds for.
- Sending payments – Set the amount of foreign currency you need, get your best exchange rate, accept it and get it guaranteed. You then send your domestic currency and your provider will send the agreed foreign currency to the bank account you specified.
- Plan ahead – Protect your profits and get a guaranteed rate today as the market may change. In 60 days time your profit could be significantly less leaving you paying 20 per cent more for the same product. This is known as a forward contract.
- Part payments – Don’t pay suppliers the full invoice up front, agree a payment plan to lower your risk and get them automated via your provider.
- Receiving payments – Get overseas payees to pay to a third party international payments provider. They can track it, set it up with your contacts and ensure you receive the payment in your preferred currency.
- Secure your money – Make sure your money is completely secure, kept in client segregated accounts and that your funds are insured.
- Recovering your funds – If you need to cancel a payment because your situation changes, make sure that procedures are in place to track and get your money back.
- 24/7 support – If you travel or need to make an urgent payment get a support team behind you and don’t restrict yourself to the banks’ opening times.