Posted on 28 June, 2018 | 5 mins
We all know there’s no certainty in the world of business. One minute everything is going as planned, and the next minute—Brexit!
If there’s one thing we can be sure about Brexit it’s that there will be change. We don't know what that will look like yet, but as with any change, there's also opportunity.
So, instead of hitting the panic button, use this moment to build a more agile, Brexit-ready business. One of the best ways to do this is to make sure you have financial apps and tools that enable you to be responsive to change. That way, you’ll be ready to take advantage of those new opportunities.
We've spoken about assessing your business's Brexit exposure and making plans to be more prepared in a time of uncertainty. Today, we want to introduce you to one of our favourite tools for doing just that around your money matters—specifically foreign exchange. You’ve quite possibly heard of it, but maybe didn’t know how powerful it could be.
Be global money ready
If you've ever compared sterling to the euro, chances are the site XE.com will sound familiar. Their detailed currency exchange information and historic rate data provide people and some of the most powerful companies in the world with the information they need to make important decisions about money.
What you may not know is that XE can also save your business time and money with their currency transfer services. Whether you’re sending or receiving international payments, XE Money Transfers has you covered with their 5-star enterprise-grade secure transfers.
The main reason we recommend XE Money Transfers to SMEs is that you can make transfers and manage your account online from any device, 24 hours a day, seven days a week. This means you don’t have to worry about fitting a visit to the bank into your already very busy schedule. The experts at XE Money Transfers built their money transfer service to make life easier for all business owners, so no matter what happens with Brexit, you can be confident that your money gets where it needs to go, and fast.
What’s the catch? XE Money Transfers doesn’t charge any transaction or account fees, but does make a very small commission on the spread, aka the difference between the live market rate and the price you pay. If you’re already doing international transfers, you’ll know that it’s an expensive and time-consuming process. We’re continually impressed with the rates XE Money Transfers offers its business customers (and some of our staff use XE Money Transfers for their personal transfers, too).
Forecast your international payments
Forecasting is an imperfect science, but its aim is to help you plan for expected market volatility in currency exchange rates. To see what disruption could lie ahead, let’s take a look at the upcoming Brexit timeline:
- June 28–29: UK to answer tough questions on Irish border and customs relationship with EU at EU summit.
- October 18–19: Transition deal set to be presented at EU summit.
- January, 2019: EU and British parliaments must ratify the withdrawal treaty before Brexit.
- March 29, 2019: Brexit day—Britain’s membership of the EU will lapse.
If you’ve been tracking international exchange rates, you’ll know that milestones like these—as well as the continuous political activities in between—can have quite the impact on foreign exchange rates. XE Money Transfers lets you prepare your business with Forward Contracts and Market Orders.
Maybe you are already anticipating a supplier payment or know about an upcoming fee. When you’re happy with the exchange rate, you can lock in that rate for a forthcoming transfer with a Forward Contract. This is a great way to be future ready while you also continue to grow your cash on hand before moving that money overseas. If you're not prepared, currency fluctuations can cause the cost of producing your product to go up, making your business less competitive. By locking in a good rate, you can protect your bottom line somewhat from Brexit-related currency instabilities. Of course, the market rate could also go the other way, so some confidence in the forex market is required.
If you’re flexible with your transfer time, XE Money Transfers’ Market Orders allow you to pick a target rate which will automatically transfer when the market hits your desired rate.
As a tip, be realistic with your future funds. There are various money apps that allow you to control your finances and prepare your business so you know you’re in a position to make that transfer. XE Money Transfers contracts are binding, just like any other contracts.
Why might I need to send money overseas?
In a global business world, companies of all shapes and sizes send money across borders to pay contractors, attend or sponsor events, pay for outsourced teams or to move funds between corporate accounts.
But perhaps the most common reason is for supplier payments. That makes one of the most pressing Brexit implications its impact on your supply chain—both inside and outside of the UK. Secure your suppliers now and work to set up a payment system that won’t be interrupted.
Another possibility is the introduction of new fees, licenses or tariffs imposed by a revised trade deal with the EU—not to mention new deals with countries and trading blocks further afield. Brexit could bring about an unexpected need to make a payment you weren’t expecting quickly to abide by new regulations. Ensure that your business continues to operate smoothly by being proactive and improving your money management sooner rather than later.
The short version (for those bored by Brexit)
Most business owners are likely fed up hearing about Brexit. It doesn't even sound like a word anymore, does it? Brexit.
It's tempting to disengage completely—particularly among all the politics—but it's important not to just yet, particularly as SMEs could be the worst affected1. An ounce of prevention today is going to be worth a pound of cure in the near future. So what can small businesses do to help safeguard their international money matters?
Be prepared for Brexit-related changes by having great financial tools that help you navigate the unknown. If you send money overseas, make one of these tools a neutral, international money transfer service. Why? Well, there are many reasons to send money abroad, and being ready to pay suppliers, fund overseas activity and pay unexpected fees will ensure your business keeps running.