Best Practices to Navigate International Payments

Small businesses are the backbone of British Columbia, numbering over 500,000 in the province. According to BC Stats, we have more small businesses per capita than any other Province, which means one in ten British Columbians operates a business in some capacity. Market expansion and doing business abroad is a crucial growth strategy for many BC companies.

Small businesses benefit from working with clients and vendors in other countries, including the US whether tapping a larger customer base, gaining options for vendors, or mitigating risk with income in different currencies. We see this in importing and exporting, mining and forestry and e-commerce, but also through marketing, advertising, gaming and film and TV production services.

At some point in their journey abroad, businesses need to navigate foreign currency. This can involve bringing in revenue in USD or Euros or paying vendors in other countries. In this blog post, the Vancouver Bullion and Currency Exchange shares best practices for small business owners to navigate international payments.

As a local currency exchange firm, we've worked with BC-based companies for over 35 years and share our expertise with them as they navigate international payments and revenue. As our name suggests, Vancouver Bullion and Currency Exchange (VBCE) is a local business in Greater Vancouver. We're family-owned and operated and a Greater Vancouver Board of Trade and BC Chamber of Commerce member.

When we meet with a business to share options for business services, we find these best practices resonate the most across industries:

1. Understand your (Forex) market when it comes to foreign exchange.

Market Analysis is information compiled from various financial data providers. If you want to navigate the Forex market's cycle of ups and downs, you must monitor this to time your exchange. Because businesses can have a lead time for a transfer, i.e., a large USD software purchase you're making in Q2, you can time your exchange based on market conditions. For our clients, our FX Traders advise and watch the market for you.

 

Benefit: It prevents exposure to volatile foreign exchange movements, protects your profits, and improves your risk management.

 

2. Don't rely on the banks to trade for you in the daytime only.

Overnight Market Orders are a common practice in currency exchange but impossible for small businesses to access with their commercial banks. If you try to get a commercial bank to check the rate after 5 pm Eastern time, you are out of luck.

 

Benefit: With a private FX Trader, you can place an order to exchange your funds at a desired rate during international trading sessions. You aren't limited to 9-5 or Eastern time zones for the trade. Our traders work with small business owners directly, advise and watch the market, and make the trade at the desired rate around the clock.

 

3. You can lock down a rate to avoid volatility.

Forward Contracts are one way to prevent exposure to volatile foreign exchange movements. These agreements to buy or sell at a specific price at a certain future date are commonly made by experienced finance teams. A company can try to gain an edge by booking forwards by working with an FX Trader or reviewing other options with them that may avoid volatility.

Benefit: In industries where volume selling is done, you can protect your profit margins, decrease your risk in currency swings, and provide more certainty to your cash flow.

Other business services we find small business owners appreciate:

• No need for cash - We can debit/ credit (PAD / EFT) your USD & CAD accounts or accept your company cheque as a payment.
• Mobile service - We can deliver/ pick up cheques from your business.
• No foreign bank account needed - We can accept Incoming and Outgoing EFTs in multiple currencies on your behalf (GBP, EURO, USD, JPY, AUD & more)
• Security - We provide secure methods of transferring funds internationally.
• Immediate confirmation - You get immediate EFT confirmations to check the details and have records of transactions for your accounting needs. 

Exploring market expansion makes businesses more competitive and diversifies growth with new opportunities. VBCE's has been credited with saving our customers millions of dollars a year and we are the leading privately owned foreign exchange company in Western Canada

To learn more about business and currency exchange and market conditions, please visit us at VBCE.ca or read the Market Watch blog, where VBCE feature more tips and options for small businesses.