SENDING OR RECEIVING MONEY FROM ABROAD? AVOID THESE PITFALLS:
If your company is starting to grow beyond UK borders, do not underestimate the impact of sending and receiving from abroad, on your bottom line.
International money transfers do not have to be complicated, but avoiding a few common mistakes could help avoid any headaches.
If you plan to send or receive any foreign currency, make sure you…
- Compare rates from different providers on a like-for-like basisThe foreign currency market is very dynamic and rates often changes from one minute to the next. If you’re looking to find the best rate from a foreign exchange supplier, remember to compare rates at the same point in time. This is easier to achieve online, but if you’re phoning around for quotes, try to keep the calls within the shortest timeframe possible to get an even comparison.
- Don’t leave it until the last minute and leave your money exposed – manage your currency risk!If you know you’re due to send or receive money, don’t wait until the last minute to make your transaction. Speak to an expert in advance to make the most of favourable exchange rates or mitigate your risk should the market turn against you by utilising payment options such as forward contracts and limit orders.
- Do your homework and find the most cost effective service & payment options – don’t just default to your bank!Many people make the mistake of going to their bank for international money transfer without shopping around first. Banks charge up to £30 for the transaction fee alone, then the FX fee is added on top. Make an educated decision about the best service provider, don’t assume it’s your bank!
- Don’t make the mistake of thinking banks have sole right on “peace of mind”Make sure your provider is FCA registered and a legitimate provider, but don’t be afraid of venturing away from your bank to make bigger transactions. When it comes to security and good rates, you can have your cake and it eat with many smaller foreign exchange providers who keeps customer funds in segregated accounts for additional protection.
- Look into hidden fees – it all adds up!Before you use a money transfer service, make sure you check all the fees and charges involved. What is their foreign exchange fee? Do they charge a transaction fee, a “processing” fee or an “out of currency” fee. Don’t get caught out on hidden fee
- Think about money you receive as well as money you send. Make sure you’re getting the most valueIf you’re due to receive money from a supplier or customer abroad, make sure you’re also receiving those funds in the smartest possible way. Whenever currency conversion is involved, speak to an expert to make sure you’re getting the most value. Again, don’t just default to your bank!
- Think about your payment method when you buy or pay online in another currencyMany websites will offer PayPal or card payments as the default for online payments, but think about bank transfers or paying with a currency card to minimise foreign exchange fees and get the best possible rates. This could make a significant difference on a larger amount or multiple payments.
- Don’t try to do it all in-house – use expertsMost small businesses are under resourced. So if you can use free expert help and support from a service provider that saves you money, why not?