Your business is almost certainly part of a global economy.
You may be based in the UK and offer what seems to be a very local service, yet supply chains are still likely to stretch abroad – just think of some of the supplies and equipment you might want to buy in foreign markets.
In this increasingly interconnected world, your business relies on being able to import or export certain goods and services from overseas.
The cost of business money transfers
So that such necessary international trading is cost-effective, you need to consider how much you are paying on each international money transfer – and find the most effective and cost-saving business money transfers service.
When you compare the market, you will find that those costs may vary widely.
The Money Saving Expert (MSE) explains that the cost of international money transfers comprises two fundamental elements:
- banks charge a host of fees and commissions for sending or receiving money to and from abroad;
- although most high street banks give you the option of paying those fees in sterling or the foreign currency, they mount up very quickly – and MSE warns that they may be made up of several seemingly small amounts, which disguise the actual total cost;
- you may need to pay a higher fee, for example, if the money transfer needs to be made more quickly;
- in addition to the fees charged by your bank, your transactions are also subject to fluctuating exchange rates;
- those rates can be difficult to establish since banks do not necessarily inform you of the rate they are using when the transfer is made – and rates can vary widely during the course of a single day’s trading.
Saving money on your business money transfers
In the first place, remember that business money transfers through your high street bank are going to cost more – often significantly more – than those made through dedicated money transfer companies.
The fees charged by money transfer companies are likely to be lower and you may achieve a more favourable rate of exchange, too.
The newer “fintech” companies specialising in business money transfers are also likely to make those transfers more speedily than your high street bank. Many can make the transfer the same day, whereas your high street bank may need several days to complete the transfer – unless you pay a premium for a faster transfer.
In addition to the cost and speed of any transfer, you must also ensure that the bank or money transfer company deals in the currency relevant to your transaction – not all currencies are likely to be supported and those available differ from one company to another.
If you are trading abroad regularly, you may find that you are making repeated payments in different currencies – so, once again, you must ensure that your chosen money transfer service provider also deals in all those currencies.
Receiving money or making payments in foreign currencies adds a further level of sophistication to your business activities. You do not want it to be a complication, of course, so find a business money transfer service provider that integrates with the accounting and management systems you are using to simplify the reconciliation of transactions.