Managing international growth and currency risk hand in hand Changing customer behaviour along with global challenges and uncertainty are creating opportunities for Accountants and Bookkeepers to support their SME clients in maximising their global opportunities...
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he events of 2020 have impacted accountants and their SME/SMB clients in many different ways, particularly around how they conduct business and how they interact with their clients. The pandemic has fasttracked digital transformation, encouraging companies to rethink their business models to safeguard their future. This transformation has, for an example, manifested in trends such as remote working and the adoption of cloud technology. Technological trends such as these have accelerated rapidly in terms of the number of people and businesses experiencing them for the first time. One side effect of this change is that in many ways it has become easier for SMEs to do business anywhere and technology advances are giving business owners the confidence to expand globally into new markets. Barriers to entry for SMEs to make this move are falling. Technology is driving that trend. A UK based company can sell products procured in China to Australian consumers as easily as an Australian business can target buyers in Europe or the North America with inventory sourced from elsewhere.
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Simon Smallwood, Accounting Channel Lead, WorldFirst UK Before joining WorldFirst Simon worked for a number of years with an SME and Accountancy focused Fintech business, having previously spent 8 years working for an Internationally focused UK based SME that he co-founded and is still running today. This provides Simon with a great insight into the benefits technology can bring to SMEs in managing their finances and the opportunities for Accountants, Bookkeepers and business owners alike.
These exciting global opportunities are opening businesses up to potential risks, in terms of currency exposure. If properly managed, however, they can help improve efficiency and reduce time spent worrying about fluctuating profit margins. This allows business owners to concentrate on what they do best - running their business.
given time in the future, up to 24 months in advance. By purchasing foreign currency via a forward contract, the SME is able to lock in the exchange rate they receive allowing them to plan and budget.
If you have clients or suppliers abroad, hedging your exposure to movements in exchange rates can have many benefits. WorldFirst offer currency hedging strategies for businesses, a service typically associated with the big banks. With over 16 years of experience, they have been working with SME clients since 2004, helping them better manage currency exposure, saving them money and time.
• Fixed forward - Allows you to agree on an exchange rate today, for a fixed amount, to be used on an agreed date in the future (which is the maturity date). • Flexible forward - Gives businesses flexibility on when they take delivery or drawdown from a fixed rate of exchange throughout the contract up until the maturity date. • Window forward - Allows buyers to purchase a specific amount of foreign currency within a range of settlement dates, known
Very simply, WorldFirst allows a client to fix an exchange rate at a
There are a number of forward contract options which I have outlined briefly below;
WorldFirst’s free-to-open online platform World Account offers you: XU Magazine - the independent magazine for Xero users, by Xero users.
