Protecting your exchange rate

Currency
Protecting your exchange rate

International trade means different currencies, and whilst this was always a consideration, the recent referendum has drastically affected the exchange rates across the board. If you sell your products or services overseas (this doesn’t just concern France and the rest of Europe: although the Euro is obviously at the heart of this crisis, the financial markets have been affected all over the world), here are a few things you can do to limit the damage.

Should you invoice in the local currency ?

Although it makes sense to convert your GBP prices to invoice in EUR or USD, this may leave you to take the brunt of the exchange rate, and the longer it takes your clients to pay you, the more likely it is that the final amount hitting your bank account will be quite different from the one you were expecting. Before adjusting your price tags to overseas markets, make sure you’re ready:

Open a currency account

If this is a regular occurrence, consider opening an account in the currencies you use the most. This allows you to wait for a favourable period to change your monies into Sterling, and you may even find it useful should you need to purchase products or services in the relevant country(ies). Your bank probably offers currency accounts, as does Paypal. Additionally, your clients will appreciate the fact that they won’t have to worry about the exchange rates either.

Consider a money transfer provider

Rather than simply allowing your bank (or your client’s bank) to manage the exchange, get paid in currency and consider using the services of a money transfer provider. Compare their rates beforehand like you would the quotes of any supplier, and go with the cheapest.