Thousands of UK company owners and managers are focusing on two actions to survive the recession – reduce expenses and keep enough cash coming in to cover costs. Those that can’t reduce overheads quickly or are subject to a large loss of cash-flow are the organisations that will ultimately collapse.
Being forced to reduce spend is a painful process. Making lists of employees to lay off along with sourcing cheaper offices, finding less expensive materials and slashing marketing budgets are all activities that cause serious upheaval. Additionally, the weight of wondering whether or not the efforts will save the organisation can cause owners and employees to suffer extreme stress.
There is however an overhead that organisations could cut immediately, yet many don’t know that it exists! Once removed, this overhead could potentially allow a company to save thousands and ultimately stay solvent!
The Hidden Overhead Exposed
If your company pays for goods or services in a currency other than Sterling OR receives payments in a currency other than Sterling, you may be paying out more money than necessary.
During the process of making and/or receiving international payments (from Sterling to Euro, US$, etc or vice versa) the banks can take a substantial margin without you even realising it. This margin can add significant cost running into many £'000s, and in some instances nearly 5% can be added to an organisations annual costs. The sad fact is that this overhead is completely unnecessary.
The banks profit from providing poor exchange rates and charging various fees. They also fail to assist companies with the money saving option available to fix exchange rates so that budgets are maintained. Although many exchange rates are unfavourable right now, it’s possible to ensure that you fix a rate so that it doesn’t get any worse over the course of the next few months or year.
Exploitation of UK Companies
The outrageous truth of all this is that the banks have caused an economic collapse, they’ve then paid bonuses for failure and to add insult to injury, they continue to cause massive financial issues with UK organisations by exploiting them on the international payment process.
Thankfully, there is a solution. By using an international payment specialist, you can completely eliminate the unnecessary costs charged by the banks. A specialist will be able to provide exceptional exchange rates, reduce and/or eliminate all fees along with mentoring organisations as to the options available to minimise risks and save money. On average, specialists can save companies 3% (or £3,000) on every £100,000 transacted. Further savings can be accomplished when working in tandem with a specialist to set and achieve budgeted rates. To avoid being further exploited by the banks discuss your options with an international payment specialist today.
For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com
Wednesday, 23 June 2010
Wednesday, 9 June 2010
An Option the Banks Won't Tell you About....
by Smart Currency’s Charles Purdy.
It is often thought that the only way to buy currency is by paying for it in full.
Most buyers that don't know about currency options buy the currency as and when it is required - they wait until the last minute. This is what the banks love their clients to do as the client is 'forced' to buy at the rate the bank offers.
Some buyers buy the €’s immediately when they know the amount even if they don't need to use them for 3 months. Buyers do this to avoid the cost of the euros increasing so they know their exact costs.
However there is a more efficient alternative that the banks fail to tell you about.
The alternative is to secure your currency requirements (without paying the full amount for them) using what is known as a forward contract.
Pretend that you require €100,000 in three months time and you don't want to risk the sterling cost increasing by £5-10,000. (An increase can easily happen due to changes in the exchange rate between now and 3 months time)
You can agree an exchange rate for those €’s now. All that would be required is a deposit of up to 10% of the sterling purchase cost.
This means that you don't need to pay the full amount for the euros now, so you can keep 90% of your funds in a sterling high interest account. By doing this you will know EXACTLY how much you will require when it comes to pay for the €’s in three months time. (You'll know that you won't need to pay an extra £5-10,000 )
It may sound complicated but is very simple to do when you work with a company like Smart Currency Exchange. And the joy of such an approach is that it removes all the uncertainty and the associated stress and strain as you know exactly what your cost will be.
For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0500 from outside the UK) or visit our website at: SmartCurrencyBusiness.com
It is often thought that the only way to buy currency is by paying for it in full.
Most buyers that don't know about currency options buy the currency as and when it is required - they wait until the last minute. This is what the banks love their clients to do as the client is 'forced' to buy at the rate the bank offers.
Some buyers buy the €’s immediately when they know the amount even if they don't need to use them for 3 months. Buyers do this to avoid the cost of the euros increasing so they know their exact costs.
However there is a more efficient alternative that the banks fail to tell you about.
The alternative is to secure your currency requirements (without paying the full amount for them) using what is known as a forward contract.
Pretend that you require €100,000 in three months time and you don't want to risk the sterling cost increasing by £5-10,000. (An increase can easily happen due to changes in the exchange rate between now and 3 months time)
You can agree an exchange rate for those €’s now. All that would be required is a deposit of up to 10% of the sterling purchase cost.
This means that you don't need to pay the full amount for the euros now, so you can keep 90% of your funds in a sterling high interest account. By doing this you will know EXACTLY how much you will require when it comes to pay for the €’s in three months time. (You'll know that you won't need to pay an extra £5-10,000 )
It may sound complicated but is very simple to do when you work with a company like Smart Currency Exchange. And the joy of such an approach is that it removes all the uncertainty and the associated stress and strain as you know exactly what your cost will be.
For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0500 from outside the UK) or visit our website at: SmartCurrencyBusiness.com
Friday, 4 June 2010
Why Businesses Lose THOUSANDS on International Payments
Are you a business using your bank for international payments or receipts? Then according to Charles Purdy, “You could be losing thousands. Depending on how much you transfer, in some cases your losses could amount to tens of thousands each year - and these losses are entirely unnecessary. But how can you avoid them?” Charles explains further.
Transfer Fees
You probably know international bank transfer fees are a nominal €20 to €30 per transaction and over the course of a year these fees add up. Even if you are only doing 5 transfers per month at €25 per transfer this is €1,500 per year – and these fees can be reduced, if not eliminated.
Bank Margins
Banks make their money on international transfers by selling currency at the interbank rate plus a margin which in some cases can be very significant. The margin applied by the banks could cost your company 1.0% one day and perhaps 1.5% another day! Most banks do not apply a fixed margin - nor do they offer competitive exchange rates. This means that the variable cost of your company making an international payment for €100,000 could be €1,500 or even higher. Rather than using a bank, it is possible to arrange an agreed fixed margin.
Failing to Fix a Forward
So what does this mean? A forward contract allows your company to reserve a certain amount of foreign currency at a fixed exchange rate to be used by a certain date.
In other words, in January 2008 your company could have reserved the rate of €1.33/£1 for £2million of euros to be used throughout 2008/2009. To secure a forward contract all your company needs to do is supply a deposit of 5 to 10%. Any company who fixed an exchange rate early in 2008 for either €'s or US$'s would have saved themselves huge additional costs as sterling weakened throughout the year.
The Alternative
By using a specialist, your company can reduce fees, get rates that are more competitive than the bank and reserve money at fixed rates for use in the future. Some specialists offer a transparent fixed margin allowing companies the peace of mind that they’re getting a good rate for every transaction.
Charles added, “At Smart Currency Exchange, we perform international payment "audits" free of charge, to identify the level of cost savings possible for your company. The savings experienced are always welcomed - particularly in this current economic climate”.
For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com
Transfer Fees
You probably know international bank transfer fees are a nominal €20 to €30 per transaction and over the course of a year these fees add up. Even if you are only doing 5 transfers per month at €25 per transfer this is €1,500 per year – and these fees can be reduced, if not eliminated.
Bank Margins
Banks make their money on international transfers by selling currency at the interbank rate plus a margin which in some cases can be very significant. The margin applied by the banks could cost your company 1.0% one day and perhaps 1.5% another day! Most banks do not apply a fixed margin - nor do they offer competitive exchange rates. This means that the variable cost of your company making an international payment for €100,000 could be €1,500 or even higher. Rather than using a bank, it is possible to arrange an agreed fixed margin.
Failing to Fix a Forward
So what does this mean? A forward contract allows your company to reserve a certain amount of foreign currency at a fixed exchange rate to be used by a certain date.
In other words, in January 2008 your company could have reserved the rate of €1.33/£1 for £2million of euros to be used throughout 2008/2009. To secure a forward contract all your company needs to do is supply a deposit of 5 to 10%. Any company who fixed an exchange rate early in 2008 for either €'s or US$'s would have saved themselves huge additional costs as sterling weakened throughout the year.
The Alternative
By using a specialist, your company can reduce fees, get rates that are more competitive than the bank and reserve money at fixed rates for use in the future. Some specialists offer a transparent fixed margin allowing companies the peace of mind that they’re getting a good rate for every transaction.
Charles added, “At Smart Currency Exchange, we perform international payment "audits" free of charge, to identify the level of cost savings possible for your company. The savings experienced are always welcomed - particularly in this current economic climate”.
For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com
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