A simple way to save money

For many years, doing business internationally was easy – exchange rates remained relatively stable and budgeting for contracts overseas was straightforward. However, with the advent of the credit crunch, exchange rate volatility has made international trade incredibly tough for many businesses.

Fortunately, one way to protect your business and profit margins in these uncertain times is to use an international payment specialist, as Denis McLeod of Capitol Industrial Batteries Systems, which manufactures and imports train batteries from the Far East, has found out. “We buy several hundred thousand US dollars per year, so even a 1 cent movement either way can equate to a significant loss if you don’t protect yourself effectively. I buy forward on orders. This enables me to secure a rate today and pay when the order becomes due a few months down the line. I preserve cash flow in the business, but lock in an exchange rate. This means I know the exact margin and that it will not be eradicated by adverse market movements”

With banks still reeling from the credit crunch, international payment specialists – independent companies that specialise purely in foreign exchange – are becoming increasingly valuable service providers to SMEs.

“We offer better than bank exchange rates and a level of proactivity and service that companies have never had from their bank,” explains Charles Purdy of international payment specialist Smart Currency Exchange. “On an average transaction, we save our clients between 1-2 per cent against their bank’s exchange rate, which equates to thousands over a year”

Denis McLeod agrees: “We bought $150,000 forward through Smart Currency Exchange and saved around £1,000 against what our bank was offering. In addition, Smart helped us to buy at the right time when the US dollar rate was much higher and compared to today’s exchange rates we avoided a £5,000 loss on the contract.”

The message is clear. Managing your foreign currency exposure effectively is a vital requirement of any business that deals internationally. As members of the Rail Alliance, the team at Smart Currency Exchange have a unique understanding of the rail industry and the challenges faced when doing business internationally. To find out more go to… or call 0207 898 0503.


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