Are you all too familiar with receiving less on your international sales than what you invoice your client? Do you constantly wonder when you will receive payment from your international customer? There are strategies you can utilize to ensure timely payment and keep more of what you earn on your international sales.
A recent survey from the Small Business Association shows that getting paid is the #1 ranked challenge faced by SME exporters, with approximately 80% of those surveyed worrying about being paid at all. This is an all too common problem for U.S. exporters, but GPFX is at the forefront of innovation in implementing a strategy to make the collections process easier and more effective in reducing the risk that exists for receiving customer payment on each cross-border sale.
As we highlighted in a previous post (Uncovering Hidden Costs on Your Imports), currency risk is embedded in every international transaction and can easily wipe out an exporter’s profit margins if not managed carefully. While being able to reduce your days sales outstanding to be more in line with your domestic receivables, it is also important for you as an exporter to receive the amount of USD that you are expecting. As buyers and sellers in different countries rarely use the same currency in their domestic transactions, a payment currency should be specified in each cross-border invoice/contract. The relative value between the USD and your buyer’s currency will likely fluctuate a great deal between the time the invoice is created and the time payment is actually received. As invoices typically carry somewhat lengthy payment terms, both sides are very much exposed to the currency fluctuations in the market.
Resources are available to help your company apply the most innovative and cost-effective solutions to not only ensure the security of your international sales, but also to enhance the relationships with your global customer by empowering your business to:
- Price products competitively across the globe
- Eliminate currency risk and hidden costs/fees for you and your customer
- Hedge foreign receivables
- Receive what you expect, when you expect it
Manex Consulting and GPFX Consultants are hosting a complimentary webinar to further discuss “Risk and Cost Reduction Measures in Global Markets” on Monday, March 27.
About the Author
GPFX Consultants LLC is a multifaceted international consulting firm based out of San Francisco specializing in the field of foreign exchange. GPFX can work with you to employ a proven cost-reduction solution to your international payment operations. Our clients have seen up to a 75% savings to this aspect of their business by engaging with us in implementing a strategy specifically designed to enhance growth opportunities across borders.
For more information or to schedule a no-cost assessment, please contact GPFX at 415.992.5928, firstname.lastname@example.org.