Whether you operate a small or big company, expanding globally is an excellent strategy to foster the development of your business and increase ROI. Selling to customers outside of your country allows you to reach a much broader market and increase your income significantly. This is an outstanding opportunity for your business to scale to the max.
However, this worldwide growth is not always straightforward. Sending and receiving money from overseas may be tricky and expensive, making you doubt your choice to target an international market. However, you should not be discouraged since focusing on a specific market might limit your company’s options. Take all the opportunities that are available to you. Keep reading this post to know more about international payments that do not require you to overpay a dime.
#1 — Shop Around for the Best Exchange Rates
Exchange rates vary greatly amongst different financial platforms and institutions. To find the best deal, compare the rates and pick a solution offering the best deal for you. It’s worth mentioning that online currency exchange platforms and online payment solutions, such as transferra.uk, may provide more competitive rates than banks since they often have fewer overhead expenses. However, before making a decision, you should also evaluate the provider’s reputation and security.
#2 — Use a Business Credit Card With Lower International Transaction Costs
Some company credit cards carry reduced foreign transaction fees. That’s definitely a benefit for you that can bring considerable cost savings for overseas payments. Therefore, it’s always a good idea to compare the fees of several credit card providers in order to find the best deal.
#3 — Benefit From Forward Contracts
A forward contract enables companies to lock in an exchange rate for a future transaction, thus, mitigating currency swings. This is particularly beneficial for organizations that make regular foreign payments, receive international payments, or have significant, one-time payments scheduled ahead of time. Forward contracts may provide companies peace of mind and help them budget more precisely since they know exactly how much they will be spending or receiving in the future. However, it is critical to thoroughly analyze the terms and conditions of a forward contract since they may incur costs and may not fit all companies. So take your time to check the terms.
#4 — Use Online Payment Solutions
One of the most effective methods to send and receive money from overseas is via Internet payment solutions. There are many options to choose from. One of the best things about using online payment solutions for international company payments is the huge reduction in costs. In general, you will pay a charge set as a percentage of the total transaction cost, with no requirement to pay exchange rate or conversion costs. This leads to a huge saving in the long run. Additionally, online payment solutions can also be integrated with third-party applications and services.
#5 — Consider Creating a Multi-Currency Account
If you often make or receive payments from overseas, you may consider opening a multi-currency account, commonly known as a foreign currency account. Simply put, this is an account type that lets you send and receive payments in several currencies. Money is either converted into the target currency or retained in the original currency until you are ready to swap it.
You will not always have to convert the cash you receive, allowing you to avoid some of the currency rates that often make international business payments so expensive. Note that they often only cover major currencies, and you should always check with the bank to determine which ones are accepted. Keep in mind that if you store money in various currencies, the value of your money may vary. If a currency loses value, your multi-currency account’s overall balance will decrease. So keep an eye on the rates.
#6 — Plan Ahead
If you know your company will be making overseas payments in the future, you may plan ahead and ensure it has adequate cash on the balance to handle the payments. This might help your company avoid taking on debt or paying extra costs.
#7 — Negotiate Payment Terms
If your company is making a substantial foreign payment, you may be able to negotiate extended payment terms with the recipient. This way, you can stretch the payment over a longer period of time, reducing the financial impact on your company.
Let’s Summarize
Large international business payments can be costly if not managed strategically. However, you can manage your finances smartly. With our recommendations, your company will start saving money on international payments and bring more profit to you in the long run.
