3 Top Currency Management Secrets from the FX Files

“The truth is out there.”

Aliens, government conspiracies, FX—the three greatest mysteries of our time. But unlike its two predecessors, FBI special agents with undeniable chemistry aren’t cracking open the FX case. For that, we have finance and treasury experts.

In the webinar “The FX Files: Secret Treasury Alternatives to Global Bank Accounts” Ernie Humphrey, the CEO & COO of Treasury Webinars, is uncovering the greatest mysteries of FX—and revealing the top three secrets that will put your business on the path to financial success.

Secret #1: The Strategic Role of Accounts Payable

In today’s world, the CFO has been challenged to impact performance across the enterprise, do more with less, and pay attention to the cash conversion cycle—specifically accounts payable and accounts receivable.

These are the main pain points that finance professionals face with accounts payable:

  • Supplier Onboarding
  • Supplier Communications
  • Information Exchange
  • Invoice Processing Time
  • Invoice Processing Costs
  • Non-Value Add Activities
  • Sub-Optimal Payments Timing
  • Sub-Optimal Payments Methods
  • AP Forecasting Inefficiency

As Ernie states, as a business moves across borders to new markets, there is a need for new risk exposures—especially in regards to payments. CFOs are expected to own the technology strategy including visibility and analytics. They’re charged with faster and sustainable growth and to lower cost while positively impacting productivity.

AP automation is the secret to this level of success. By adopting an automated solution, your business will foster growth by improving productivity across the enterprise, mitigate cost, and manage risk effectively. These are the dimensions of value with a streamlined AP process:

  • Mitigates invoice processing costs
  • Mitigates the payment of duplicate invoices
  • Mitigates time spent resolving supplier issues/disputes
  • Allows discount opportunities to be captured
  • Facilitates early payment program (dynamic discounting & supply chain financing) opportunities
  • Impacts the productivity of employees processing invoices
  • Mitigates payment processing costs
  • Rebates from commercial card payments
  • Improves working capital management
  • Impacts the productivity of employees approving payments

Secret #2: The Hidden Complications of International Payments

Complications abound when managing cross-border accounts payable. These are just a few issues that finance professionals face when going international:

  • Supplier Onboarding
  • Supplier Communications
  • Information Exchange
  • Invoice Processing Time
  • Payment Timing

As Ernie states, the top three problems that lead to late payments and missed discounts are lengthy approval cycles, missing information on invoices, and lost invoices.

In addition, there is a multitude of tax and compliance requirements that open your business up to FX risk exposures. With cross-border payments, you need to be mindful of assets and liabilities in foreign currencies, liabilities denominated in foreign currencies, and fluctuations in exchange rates that impact a company’s functional currency.

Secret #3: The Value of Leading Technology

This is what a company’s FX process might look like without an automated AP solution:

This is what a company’s FX process might look like with an automated AP solution:

And the benefit of technology doesn’t stop there. As Ernie states, these are the main reasons to adopt an automated solution:

  • Mitigates invoice processing costs and the payment of duplicate invoices
  • Mitigates time spent resolving supplier issues/disputes
  • Allows discount opportunities to be captured
  • Facilitates early payment program opportunities
  • Impacts the productivity of employees processing invoices
  • Mitigates payment processing costs
  • Rebates from commercial card payments
  • Improves working capital management
  • Impacts the productivity of employees approving payments
  • Mitigates FX risk exposure
  • Mitigates the cost and complications of international bank relationships

By recognizing the strategic role of AP, understanding the complications of international payments, and utilizing technology to their advantage, CFOs can now focus on being a key strategic driver of business performance. Believe us, by keeping these top three secrets in mind, you won’t need Mulder and Scully on the case.