Recieving Payments from Overseas Customers Cost Effectively
In the UK, there are over one million businesses that export goods and services each year. In addition, there are around 50,000 people self-employed in
the UK receiving money from overseas clients. In total, the value of exports to the UK economy adds up to £500 billion per annum.
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Revenue from abroad can be key to your work’s success, yet there are a number of problems often associated with
receiving these payments that can cause major issues for you and your business. Cost is perhaps the biggest issue associated with receiving
payments from overseas clients. Many banks charge a fee of up to five per cent on the transfer amount. This is known as the Margin. The Margin
is the percentage difference between the inter-bank exchange rate and the rate you, the customer, is offered. For example, on a transaction where your
business is receiving €10,000, the bank can take up to €500 from the overall amount. To credit non-sterling payments in to your account, some banks will
charge an additional fee as high as £30 per transaction.
This can make it difficult for a business to predict its financial position, never truly knowing how much money will be received from an overseas payment.
Further to this, exchange rates can fluctuate drastically between the time an invoice is sent and payment is received, making it even more difficult
for you or your business to protect or manage your profit margins.
You may decide to open a foreign currency account to receive money from overseas customers, as many clients feel more comfortable paying in their
own local currency. However, this still allows for banks to charge a margin when your business requests the currency to be converted back into sterling.
It creates a further issue of not knowing what to charge the client in their local currency, due to exchange rate fluctuations.
At currencytoday.co.uk we can help you overcome all of those issues, saving time and money on your foreign exchange transactions.
But don’t take our word for it. Here’s an example of how we have helped one of many businesses in this area.
A specialist plastics manufacturer based in the UK exports its products to various European Union nations. It invoices clients in their local
currency, the Euro, and payment is made to their own dedicated currency account set up with Commerzbank in Germany.
When it noticed that the exchange rate into sterling provided by Commerzbank was much worse than the headline rate on the high street, it decided
to keep the money in Euros and send it directly to its sterling account with Nat West. But this rate turned out to be even less competitive than the
one used by the German bank, so it decided to take action.
The company’s financial director began researching online different methods of completing money transfers in a more cost effective manner.
Having come across a number of websites claiming to be experts in foreign exchange, he saw an article on currencytoday.co.uk that offered easy to
understand advice on foreign exchange firms, including information on how the process works. He then viewed the comparison section of the site that
helped to narrow down the most suitable exchange firm for his business from a list of only the top, award winning, UK foreign exchange firms
dedicated to delivering the best possible service to its customers.
Having looked through the potential options, the financial director decided that
one of them offered the best option for him, with a
competitive exchange rate and vast industry knowledge. The rate offered was consistently 1.5 per cent better than the company’s bank Nat West,
meaning he saved an average of £1,500 per month or £18,000 a year on an average monthly transaction size of £100,000 (approximately €120,000).
Want to follow their example? Fill out our contact form to find out how
our experts can help you.
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