Is Your Business Leaving Money on the Table?
If you’re a business-to-business company trying to add to your bottom line, you may source products, parts, inventory or equipment from foreign suppliers. You may also sell your goods or services to foreign markets to increase your revenue or market share.
More businesses are doing this than you realize – maybe even yours.
In fact, small- and medium-sized companies comprised 99.7% of all identified exporters and 97.1% of all identified importers, according to a 2016 report from census.gov.
Is Your Company Getting the Best Foreign Exchange Rates?
It’s easy to convert these foreign payables and receivables from one currency to another, but if you’re not getting the best foreign exchange (FX) rate, you’re leaving money on the table.
“Most companies don’t realize what these hidden costs add up to. They assume that since the amount they are buying or selling internationally is such a small piece of their overall budget, that the money they’re losing can’t add up to much,” explains Drew Collins, Managing Partner at Bannockburn Global Forex, LLC. “That’s one of the biggest falsities out there. There aren’t many companies not willing to save $10,000, $100,000 or even more than $1 million in annual expenses that they didn’t realize they were paying.”
Drew and his team meet with businesses to educate them on the foreign exchange market. Then they’ll analyze the company’s historical transactions to show exactly where the market was when the company executed the trade, and unearth any hidden costs these businesses paid. From there, they become the eyes and ears in the market to advise these businesses on when to make or receive payments to ensure they get better rates moving forward.
“There’s no transparency in the currency market. If you call in to buy 100,000 euros, for example, you’re going to get your trade confirmation. Nowhere on that confirm is it going to show the commission earned,” Drew explains. “You have no idea what you paid your foreign exchange provider. We show you and commit to a fixed spread moving forward.”
Drew has saved companies anywhere from $5,000 to $2 million a year, depending on how much volume the company does and what kind of pricing they’re getting from their current provider.
How to Ensure Your Business is Getting the Best Foreign Transaction Rates
First, you should simply be aware of whether your company is making or receiving foreign payments.
Drew has seen cases where the CFO thought his company was making every payment in U.S. dollars. As it turns out, however, the company’s payables clerk identified 12 monthly foreign invoices they pay every month. These payments were costing them nearly $35,000 annually because they weren’t getting good pricing from their FX provider.
After assessing your company’s foreign exchange practices, consider meeting with Bannockburn Global Forex, LLC, who is willing to explain how the markets work and what kind of cost savings may exist. Most businesses have their banks handle foreign transactions; however, Bannockburn Global Forex, LLC can provide better foreign exchange pricing than banks. “That’s because banks have so much more overhead than we do, so we can give those extra overhead costs back to the company,” Drew points out.
Plus, if you do choose Bannockburn Global Forex, LLC, you can keep all of your bank accounts with your existing bank. Bannockburn simply settles the trade through your existing bank account structure.
Talk with a Foreign Exchange Expert Today
Let i3 Merchant Solutions’ partner, Bannockburn Global Forex, LLC, help you get the best foreign exchange rates possible. Contact Drew Collins at (513) 386-8296 or [email protected].
Subscribe to Card Talk
Our monthly newsletter delivers the latest payments news straight to your inbox