7 tips for optimising your foreign currency cash flow management

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

#1 Save money on your foreign exchange transactions

As part of its operations, a company doing business internationally regularly needs to carry out foreign exchange transactions, which involve converting an amount in one currency into another. Although the cost of such transactions is less visible than some more obvious expenses, it can in fact amount to considerable sums and affect your company’s profitability!

Even so, it is possible to keep the cost of your foreign exchange transactions down by paying close attention to hidden fees. Banks sometimes take advantage of their long-standing monopoly to widen spreads as far as possible in order to profit from your transactions (or even to charge a flat fee on every transaction for “processing costs”). Hidden fees that can amount to as much as 4% of the amount exchanged!

To be sure of saving money on your foreign exchange transactions, choose the transparency of a specialist exchange service such as b-sharpe: as you can see for yourself using our exchange rate calculator, we offer a particularly attractive rate that keeps your exchange and transfer fees to a minimum.

#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 fees – are essential to managing your foreign currency cash flow. But that isn’t the only lever available to you!

Perfectly managed, optimised foreign currency cash flow also depends on the quality of the services provided by your financial intermediary. Security, expertise, support… Specialist foreign exchange providers offer tailored services that banks generally do not.

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

#3 Pay your suppliers in the currency of their choice

It may sound counterintuitive, but making your international payments in your local currency isn’t always the best way to manage your transactions. By paying a supplier in your local currency when they have invoiced you in a foreign currency, you are effectively passing the exchange rate risk of the transaction on to them. To protect themselves, they will then charge you additional fees.

To avoid this pitfall, it’s better to pay your suppliers in the currency of their choice! This not only lowers the cost of your invoices, speeds up your payments and protects your margins, but also builds a relationship of trust with your business partners.  

Nothing could be simpler: ask your supplier to invoice you in their local currency, then turn to an online currency exchange specialist such as b-sharpe to lock in your exchange rate and make the payment.

#4 Invoice your customers in their local currency

Along the same lines, systematically invoicing your international customers in their local currency is another lever you can use to optimise the management of your foreign currency cash flow. This approach is, above all, more convenient for your customer, who then has no exchange issues to deal with on their end. It also helps strengthen trust and keeps your pricing fully transparent.

What’s more, invoicing your customers in their own currency clearly reduces the volatility of your prices abroad – 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 is a clear advantage for them, as it means they avoid having to open a bank account in Switzerland, along with all the constraints that process can involve (time and administrative burden, minimum deposit required, and so on). 

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

Time saved, and interbank transfer fees and exchange fees cut to a minimum compared with the services of a traditional bank… Here too, making your payments in local currency lets you manage your cash flow as effectively as possible.

#6 Choose a fully digital solution

To manage your foreign currency cash flow as effectively as possible, using a 100% digital solution offers many advantages. You will be able to manage your foreign exchange transactions and cash flow from anywhere, and in far shorter timeframes than with a partially digitised solution.

What’s more, fully digital solutions always offer far more attractive costs than a traditional bank’s standard services. Because digital services have lower overheads, they can offer unbeatable exchange rates!

#7 Be uncompromising on security

Finally, ensuring your money transfers and foreign exchange transactions are fully secure is naturally a fundamental part of managing your foreign currency cash flow well. To do this, you need to check several points with your financial intermediary, in particular its regulatory status and the insurance guarantee it offers you.

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

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

Watching out for hidden fees, paying your suppliers, customers and employees in their local currency, choosing a specialist, fully digital exchange service… You now know all the criteria for optimising the management of your company’s foreign currency cash flow.

Bear in mind, however, that there are other levers you can pull to manage your transactions as effectively as possible and protect your margins, in particular by improving your hedging against exchange rate risk.