Every single day, more than five trillion dollars exchanges hands in the forex market—that’s more than the New York Stock Exchange. But, as foreign exchange and currency exchange flourishes, many financial executives struggle to manage global payments effectively. Here are the most common forex problems, and how you can solve them.
1. It’s Time Consuming
The Problem: If you’ve dealt with forex for some time, you know that it can be a long and laborious process. Managing international payments manually requires an exponential amount of time and resources. Different countries have multiple procedures when it comes to sending and receiving funds across borders, and keeping track of all these processes requires a significant amount of bandwidth.
The Solution: Whether your company operates in London, Japan, Singapore, or anywhere else in the world, an automated payables solution can help save you time and money. Not only does a software solution remove the hassles of converting and funding in different currencies, but you’ll also get highly competitive rates for conversions. Which will, in turn, help your finance team manage corporate accounts more effectively.
2. It’s Difficult to Track
The Problem: With forex trading, payments are coming from different locations around the world, not just the United States. It’s time-consuming to track all of these accounts manually, especially as your business grows.
The Solution: Never underestimate the power of a payment management system. With a robust solution in place, you can manage tasks such as payroll & commission payments, expense reimbursements, taxation & regulatory payments, etc. Plus, you can access all of your data from one central place in real-time. You’ll improve compliance, save money, and streamline those cumbersome back-office tasks.
3. There’s Too Much Risk
The Problem: There are various factors that can influence the foreign exchange rate, including global markets and currency volatility. As a financial executive, you need to prepare for all outcomes associated with foreign exchange and currency risk, otherwise, you could lose a significant amount of time and money. For many businesses, this means hiring additional staff in order to manage high-risk global payables effectively. But what if your finance team is a lean operation? And hiring more headcount isn’t an option?
The Solution: Incorporating the latest technology into your financial services organization, such as an accounts payable solution, will help eliminate the risk associated with foreign currency conversion. This type of automation manages the maintenance associated with paying regional bank accounts—without adding headcount. Plus, you can benefit from one central virtual account that facilitates payments across multiple entities.
Forex management in 2019 and beyond is going increasingly digital, and if you want to improve compliance, enhance cash flow, reduce costs in your organization, and contribute to the bottom line, you need to understand and combat these top three problems.
