7 tips for optimising your foreign currency cash flow management

To help you grow your business under the best possible conditions, here are our 7 tips for effectively managing your foreign currency cash flow.

#1 Save money on your foreign exchange transactions

As part of its business operations, a company operating internationally regularly carries out foreign exchange transactions, which involve converting an amount denominated in one currency into another. Although the costs of such transactions are less obvious than some more obvious expenses, they can in fact amount to considerable sums and impact your company’s profitability!

However, it is possible to keep costs down when exchanging currency by being particularly vigilant about hidden charges. Indeed, banks sometimes take advantage of their long-standing monopoly to widen spreads as much as possible in order to profit from your transactions (or even to charge a flat fee on each transaction for ‘processing costs’). These hidden fees can amount to as much as 4% of the amount exchanged!

To be sure of saving money on your currency exchange transactions, opt instead for the transparency offered by a specialist currency exchange service such as b-sharpe: as you can see from our exchange rate simulator, we apply a particularly attractive rate that minimises your currency exchange and transfer fees.

#2 Demand a high-quality currency exchange service

Of course, the savings you can make on your foreign exchange transactions – whether by securing the best possible rate or by minimising hidden costs – are essential to managing your foreign currency cash flow. However, this is not the only lever you can pull!

Effective management and optimisation of foreign currency cash flow also depend on the quality of the services provided by your financial intermediary. Security, expertise, support… Specialised foreign exchange services offer bespoke solutions that banks do not usually provide.

At b-sharpe, we are proud to offer all our customers a 5 million Swiss franc insurance guarantee protecting them against fraud and hacking, a particularly fast currency exchange service, and customer support that is always available – with no waiting times!

#3 Pay your suppliers in the currency of their choice

It may seem counterintuitive, but making international payments in your local currency is not always the best way to manage your transactions. This is because, by paying a supplier in your local currency when they have invoiced you in a foreign currency, you are effectively passing on the exchange rate risk associated with the transaction to them. To protect themselves against this, they will then charge you additional fees.

To avoid this disappointment, it’s best to pay your suppliers in their preferred currency! This will not only reduce the cost of your invoices, speed up your payments and safeguard your profit margins, but also help build a relationship of trust with your business partners.  

It couldn’t be simpler: ask your supplier to invoice you in their local currency, then use an online currency exchange service such as b-sharpe to lock in your exchange rate and make the payment.

#4 Bill your customers in their local currency

In the same vein, systematically invoicing your international clients in their local currency is another strategy you can adopt to optimise your foreign currency cash flow management. This approach is, above all, more convenient for your client, who then has no currency exchange issues to deal with on their end. It also helps to strengthen the relationship of trust and ensures complete transparency regarding your pricing.

Furthermore, invoicing your customers in their own currency significantly reduces the volatility of your prices abroad. This is a significant advantage when it comes to effectively managing your margins internationally.

#5 Pay your employees in their local currency

Paying your foreign employees in their own local currency offers a clear advantage to them, as it means they do not have to open a bank account in Switzerland, with all the complications that this process can entail (time constraints, administrative burdens, minimum deposit requirements, etc.). 

By using a service specialising in the transfer of salaries in foreign currencies, you too can benefit from this method of paying your employees: b-sharpe automatically converts your payments from Swiss francs into local currencies and transfers them directly into your employees’ accounts. What’s more, you don’t need to hold multiple foreign currency bank accounts! 

Save time and minimise interbank transfer fees and currency exchange charges compared to traditional banking services… Once again, making payments in the local currency allows you to manage your cash flow more effectively.

#6 Opt for a 100% digital solution

To manage your foreign currency cash flow as effectively as possible, using a fully digital solution offers numerous advantages. You will be able to manage your foreign exchange transactions and cash flow from anywhere, and do so much more quickly than if you were to opt for a partially digital solution.

What’s more, fully digital services are always much more cost-effective than traditional banking services. As digital services have lower operating costs, they are able to offer unbeatable rates!

#7 Be uncompromising on safety

Finally, ensuring that your money transfers and foreign exchange transactions are fully secure is, of course, a fundamental aspect of effective foreign currency cash management. To do this, you should check several key points with your financial intermediary, particularly regarding their regulatory status and the insurance cover they provide.

b-sharpe is a financial intermediary subject to Swiss financial regulation through So-Fit, a supervisory body recognised by FINMA (the Swiss Financial Market Supervisory Authority). It also benefits from the financial strength provided by its principal shareholder, the Migros Geneva Cooperative Society.

Finally, b-sharpe provides you with insurance cover of up to 5 million Swiss francs to protect your foreign exchange transactions against fraud and hacking!

Keep an eye out for hidden costs, pay your suppliers, customers and employees in their local currency, and choose a specialist, fully digital foreign exchange service… You now know all the criteria you need to meet to optimise your company’s foreign currency cash flow management. 

Please be aware, however, that there are other measures you can take to manage your transactions more effectively and protect your margins, in particular by improving your hedging against currency risk.