Having an international presence is one of the best choices a small business can make.
With the international consuming class expected to grow by 75% to 4.2 billion people by 2025, expanding your operations overseas will give you the opportunity to capitalize on international demand and enhance sales potential of your current offerings.
In addition, you get to source products from low-cost countries and recruit skilled individuals.
But while global expansion increases your potential for growth, it’s not without challenges. A major one is international payments. Conventional banks often put hefty fees on international transactions for businesses. Also, managing business finances across multiple currencies is no easy feat. Unfavorable exchange rates can eat away your profit potential.
Fortunately, there are ways to overcome these challenges. While you may lose the comfort of conducting transactions in your preferred method, you can manage international money transfers efficiently with the tips mentioned below.
1. Look for Hassle free Money Transfer Services
Though there are multiple services that offer to transfer money internationally, Ria Money Transfer and other similar options enable businesses of all sizes to enjoy low fees and great rates on international money transfer. Additionally, they offer a simple method for conducting transactions. You just need to provide the last name and first name of the recipient as shown on their official ID, phone number, and address. Transfers can be deposited directly into the recipient’s bank account or you can choose to have the recipient pick up the funds from a local branch. These service providers have physical offices in most parts of the globe.
2. Multi-Currency Accounts Work Well
Since long, small businesses have been irritated by the overheads banks charge for international transactions. Specialist multi-currency accounts offer a solution to this problem. These accounts transfer and convert your funds at a fraction of the rates of the big financial institutions. Online multi-currency business bank accounts can save businesses more than 50% on transactions. When choosing a multi-currency provider, research and compare different options; it is the smaller providers in most cases that can save you a decent amount as opposed to known names and big banks.
3. Currency Forwards Can Help Prevent Losses
This is a financial product that will enable you to lock in a particular exchange rate if you are going to receive funds or make an outgoing transaction soon. Currency forwards increase your financial certainty and reduce your company’s risk to volatility of exchange rate. Imagine issuing an invoice in Singapore dollars when the rate is 0.75 to the US dollar, but it gets cleared when the rate is 1.00 – you suffer a 20% loss. Currency merchants that deal in same day payments are worth keeping tabs on and can be beneficial to use when invoice payments have been left to the last minute.
4. Work Lump Sum Transactions
You can save on international transactions by receiving and making payments in a lump sum. If you send or receive smaller invoices, the fee will add up, so it could be better to wait, especially if you trust the people/parties you work with. If you make weekly invoices, switch to monthly billing to avoid losing money. The additional benefit is less stress on your finance department.
Follow these tips to maximize the take-home amount for your business.