But running an import-export business can be complicated and laced with risks, especially if yours is a small company. Here Camilla Bellhouse,  Head Trader at Supply Chain Funding Network, URICA, gives her top tips for managing those risks and keeping your international trade thriving

Import-Export Activity Needs Good Organisation

When dealing with trading partners in multiple regions, efficient organisation and administration are key. Online tools can be excellent for this, from simple to-do list apps such as Wunderlist and Things, to online invoicing platforms. Sending and receiving invoices over email can be onerous when you use your email accounts for multiple purposes. Using an online payments network keeps all of your payments administration and communication in one separate place, with the added benefit of working seamlessly across borders.

Flexibility – Key to Build Export Relations

Working with numerous clients and suppliers internationally can also mean encountering and managing different cultures and preferences in doing business and completing transactions. It’s important to stay adaptable, and to work with clients regarding their preferred methods of delivery and payment, in order to avoid damaging relationships that are important to your company’s success.

Key Challenge Doing Export/ Import Business: Currency Risk

There are many organizations that support selling services, products or talent overseas, and you needn’t be at the mercy of currency exchange rates when handling the many moving parts involved with your import-export business. With advance payment platforms such as URICA, you can choose the currency you would like each invoice to be paid in, and also the timing of your payment, managing the risk that exchange rates may swing out of your favour.

Managing Credit Risks Is Paramount For Imports/Exports

Effective credit management can help your company stay competitive. With four banks responsible for 80% of lending to SMEs, U.K. businesses have had few financing options. But when the government set up the British Business Bank in 2013 it fired up some new players like us to break the banks’ stranglehold on business finance. We don’t require any personal guarantees or assets to be put up as security when we give our credit terms, we simply check that the company making the payments is credit-worthy, and charge a fee for using the platform that is in most cases between 1 and 2% of any given invoice value.

Keep the Cash Flowing

Cash is king, goes the adage. Indeed, it has been estimated that around 39 billion pounds is tied up in late payments of invoices between businesses at any time in the UK. You may be perfectly profitable and have a number of payments pending and new clients in the pipeline, but having a solid pool of working capital at hand will always help a small business manage costs when payments get delayed for any reason. If you’re exporting, you may wish to receive payment before parting with a lot of valuable product. When URICA facilitates the payment of an invoice, it takes on all the risk of late or non-payment on that transaction.

In the years since the financial crisis, access to credit for small businesses has been plagued by the risk-adverse lending environment, leading to the need for the applicant to put up security and lengthy bureaucratic processes; businesses being told to wait eight weeks for credit – when they have 12 to fulfil a big export order. The chronic nature of the problem is thought to be causing a growing number of firms to become “permanent non-borrowers”, with the SME Finance Monitor from BDRC Continental showing that 48% of SMEs are classed as PNBs.

When the banks created invoice financing offerings to help companies release capital tied up in late payments without having to borrow, their services were expensive at best, and damaging at worst. What with sky-high costs and insensitive chasing of unpaid invoices, third party invoice financing become something of a dirty word. In a 2009 survey, 63% of business owners said they would not consider going to a bank for help with invoice payment. But the new networks springing up are a different, more efficient and risk-taking breed.

So before you go to a bank to help improve your import-export business, consider the other options, which may not only save you money, but have added administrative benefits too.

 

New Methods of Payment for Imports/ Exports

Register for a webinar ‘New Payment Methods for Imports and Exports’, delivered to you in partnership with UK Export Fiannce and URICA.

Register here.

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Camilla Bellhouse

With a background in Client Relations and Business Development, Camilla has been instrumental in growing URICA’s presence in the UK market over the last two years. Having managed some of the biggest accounts, Camilla is now responsible for business expansion and deal origination in Germany.

For further information, contact Camilla on 0207 193 7509 or camilla.bellhouse@urica.com.

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