By Ryan Miller
Business Development Director, Corporate Foreign Exchange
Western Union Business Solutions
Once you’ve struck a deal with a business anywhere in the world – either as a seller or a buyer – you’ve got to settle the bills. One of your best advisors can be an organization with expertise in moving money around the globe. Your reputation depends on making payments reliably on time, and your solvency depends on getting them on time. You don’t want to get swamped in a morass of problems brought on by business customs, unfamiliar regulations and fees and fluctuating currency exchange rates.
Your foreign exchange (FX) services provider should do more than simply supply you with the means to transfer funds. They should help you build a strategy around your unique needs and understand the dynamics of an ever-changing market – both in your industry and in the countries where you do business. An FX provider who helps you manage your payment risks can give your business access to the right solutions, strategy, and support to help turn foreign exchange into a key competitive advantage.
A dedicated FX provider should help you to:
- Identify, measure, and manage your currency exposures
- Explore alternative payment options and approaches
- Reduce redundancies and costs when paying overseas
- Position your company to harness market volatility safely and effectively
- Protect your bottom line
- Control your costs
An outgoing payments solution should:
- Streamline processing - One easy file upload should provide your company with a template and process for all incoming, outgoing, domestic, and international transactions.
- Reduce cost and errors - An enrolment program should allow your vendors to manage their own information, including bank account details, helping to ensure accurate and timely payments.
- Improve your risk management strategy - A dedicated specialist, backed by market reporting services, should help you use appropriate cash and risk management tools to implement a suitable strategy to reduce your risk and protect your bottom line.
For incoming payments, your partners should have the ability to send you payments in their local currency. This can give you a competitive edge through convenience and simplification for your customers and clients.
Your FX provider should then be able streamline your accounts receivables process by allowing you to quickly and efficiently manage payments. That should accompany a system to provide reports and updates on payment status.
Here are two methods to consider for receiving and converting foreign funds into US dollars:
- Incoming Electronic Funds Transfers
Whether remitted from within your organization or a third party, this is simple and flexible. Look for the ability to retain control over the rate at which to convert the funds. The rate may be locked in before the funds arrive or once receipt of the funds is confirmed. If you lock-in a rate before the funds are received, the order is processed once receipt of the funds is confirmed, and your USD payment is issued the next business day.
If a rate is not locked-in at the time of the order, have the ability to choose to accept the current rate or wait up to 90 days for a more favorable one. If you choose to wait, monitor the market and decided when to lock in.
If you know of a pending or upcoming invoice that will require the same currency as a payment you just received, see about having some sort of holding account that can remain.
- Incoming Foreign Currency Drafts
A service for incoming foreign currency drafts could allow you to efficiently convert foreign currency checks into USD. Look for a service that allows you to accept USD checks issued by select foreign banks and USD checks without routing numbers (usually from U.S. branches of foreign banks). Payment is almost always conditional upon final clearance by the issuing bank.
Certain industries have unique requirements when it comes to foreign exchange. Look for a service that is familiar with your industry.
You can contact Ryan Miller by Phone: 770-689-2507770-689-2507 or email: firstname.lastname@example.org or visit www.business.westernunion.com. Ryan is a Business Development Executive, Corporate Foreign Exchange, Western Union Business Solutions with over 12 years outside/inside sales experience focused in financial services, payment solutions.