CurrencyWave is pleased to announce it’s sponsorship of the Calderdale and Kirklees Manufacturing Alliance (CKMA).

Calderdale and Kirklees Manufacturing Alliance (CKMA) exists to support local manufacturers. Run by manufacturers, for manufacturers it is a membership organisation who meet together to share best practice, experience and knowledge, bring together the local supply chains and encourage collaborative working.

CurrencyWave, based in Leeds, removes the pain and high cost that many manufacturers face when moving money around the world. Our ground-breaking multi-currency account gives them access to the global banking system with bank-beating exchange rates, fast/free international payments and currency risk management tools.

Using a specialist foreign exchange broker is a smart way to reduce hidden costs applied by banks and also helps manufacturers solve the problem of adverse currency movements affecting their profitability. Manufacturers may outsource part of their production overseas, import raw materials or run a foreign payroll meaning their profits can be subject to the variances of exchange rates. CurrencyWave can help by identifying foreign exchange exposures and then implementing a strategy to mitigate this risk which is often exacerbated by long production cycles.

CurrencyWave provides:

• A single IBAN account that can receive, hold and pay out in over 34 currencies
• Access to near wholesale exchange rates
• Flexible forward contracts
• Free SWIFT international payments/receipts
• A dedicated relationship manager
• An FCA regulated and authorised FX platform

Jamie Holmes, director of CurrencyWave said:  “We are excited to announce our association with the CKMA which is an important resource for local industry. Businesses in the North of England, including many manufacturers, are particularly underserved when it comes to accessing the services of independent foreign exchange brokers. Being based in Yorkshire means we are ideally placed to offer CKMA members a truly local service in global currency markets, something the London centric FX industry cannot provide.”

For further information call 0113 451 0180 or email: jamie.holmes@currencywave.com.

The post CurrencyWave sponsors CKMA appeared first on Currency Wave.

On 1st January 2021, the Brexit transition period will end and new rules governing the movement of goods between the UK and the EU will come into force. Despite transitional procedures aimed at simplifying and streamlining this process, additional requirements will be required from day 1 – are you prepared yet?

BHP accountants have put together a valuable checklist of items that importers and exporters need to consider to assess their readiness and identify gaps in planning.

Importers checklist:

Exporters checklist:

The post Brexit planning checklists appeared first on Currency Wave.

In response to this increased demand, SWIFT gpi was created to improve the way in which SWIFT users process their payments, saving time and increasing transparency and traceability.

New generation payment solution

SWIFT gpi (Global Payments Innovation) went live in 2017 and is a new generation payment solution enabling safer, faster, and more reliable cross-border payments. Since launch, adoption continues to be rapid, with more than 4000 financial institutions now using the system. The initiative introduced a whole range of solutions that were previously non-existent or very fragmented at best.

The new system was deployed on existing infrastructure, which means that financial institutions can use resources to create additional services around it instead of trying to migrate from existing systems that are historically extraordinarily challenging and risky.

Trillions of dollars in payment transactions are made daily but the mechanics of cross-border payments and the challenges faced by financial institutions when providing such services remain mostly invisible to the public.

What does it do?

SWIFT gpi combines domestic real-time payment networks to deliver cross border payments almost instantly and without the restrictions of bank operating hours. Each transaction is assigned a Unique End-to-End Transaction Reference (UETR) that payment providers can use to trace the transfer from start to finish.

The tracking feature is essential for a straightforward reason: errors and failed transfers are costly. In Europe alone, 2% of international transactions fail, which translates into $21 billion each year.

Gpi also offers a pre-validation feature, which reduces the likelihood of transaction failure by asking the beneficiary bank whether the transaction would succeed with the given information before it is executed.

Simplified case resolution means that the members of SWIFT gpi can resolve payment queries much quicker and without entering into lengthy disputes, which reduces operational costs and improves customer satisfaction.

Customer benefits:

Speed

Gpi substantially increases payment speed. 50% of transactions are completed within 30 minutes, and 96% are completed under 24 hours. Customers no longer need to guess how long the payment may take. It also enables faster business decisions as it is common for customers to request payment status updates, with increased tension between businesses if there are unexpected delays.

Security

SWIFT takes security very seriously. Gpi offers a portfolio of Financial Crime Compliance solutions that help member institutions to navigate more complex compliance requirements.  Increased security between institutions also means a safer environment for their customers. Secure payments increase trust and encourage the customer to use the facility more often without fear that the money may be lost somewhere during the transaction,

Transparency

The initiative provides full visibility of costs and charges deducted by each carrier along the payment route. This greater transparency allows customers to have a clear understanding of the entire payment process. With end to end payment tracking, customers know exactly where their funds are in the payment journey, much like the delivery of an Amazon parcel.

Reliability

For any cross-border transaction, customers expect that the money will reach the recipient and the amount will remain the same as agreed by the sender institution. SWIFT gpi ensures consistent and dependable transactions that stay consistent even if multiple institutions are involved.

Summary

The rapid adoption of SWIFT gpi by the majority of the world’s leading financial institutions is proof that the initiative addresses the challenges the industry has been having for years. Reduced complexity of cross-border payments, faster delivery, and full transparency are critical elements of modern payment technology.

SWIFT gpi already enables $300 billion of daily transactions, with 50% less enquiry-related costs.   The daily transfer volume will continue to grow, as financial institutions continue its adoption.

The initiative will continue to keep up with future changes and requirements, with a well-defined roadmap to ensure continuous improvements and introduction of new services along the way.

The post What is SWIFT gpi? appeared first on Currency Wave.

Improved connectivity, new technologies, and growing demand for talent bring new opportunities for companies that aren’t afraid to search beyond their country’s borders.

Nowadays, more and more freelancers work for companies without ever stepping foot on the same soil.  Digital industries are at the forefront of using freelancers to fill the knowledge and skill gaps in their workforce.

Opportunities bring challenges too. Whilst companies know how to work with remote freelancers, payroll taxation, employment laws, and currency rate fluctuations remain the most challenging and resource-intensive areas for any business that wants to work with global talent.

Opportunities

Not all companies in the digital sector need or can employ specialists on full-time contracts, making freelancers ideal candidates in situations where they are only required for a few hours or until a project ends.

Contractors and freelancers are also increasingly more active when searching for jobs. Sometimes it means higher pay, while more often it’s all about utilising the unique skills they have.

This mutually beneficial situation has evolved into an ecosystem where recruiters, managers, and consultants work together to ensure that companies can access the talent they need. At the same time, the ecosystem makes it easier for freelancers to find such companies and opportunities they may offer.

Challenges

Employing foreign nationals based in their own country requires a sound understanding of the legal landscape in both jurisdictions. Some companies prefer to have locally registered entities that often simplify the recruitment and hiring processes; however, this can be a slow and expensive process and is usually only available to larger companies with sufficient resources.

It’s not uncommon for companies to have teams of freelancers distributed in multiple countries with very different legislation. In such a situation, companies must understand the relevant laws of each of those countries.

However, one particular process can quickly turn into a monthly nightmare if not managed well. All freelancers want to be paid on time and in full. Any delays, shortfalls or mistakes cause anxiety and friction. Payroll for overseas employees is even more complicated, as it involves foreign currency exchange.

Available solutions

Companies involved with international payroll can benefit from a well-established currency strategy.
A global payment provider, such as CurrencyWave, can help to evaluate your current situation and minimise potential pitfalls.

For companies with larger payrolls or widely distributed workforce, CurrencyWave offers a bulk payment upload solution that allows companies to easily upload the information, make multiple currency conversions simultaneously and automate mass payments. This avoids the pain of trying to pay freelancers individually while also applying uniform exchange rates to each transaction.

Bulk payments not only save time for the finance and payroll teams but also allow standardisation of payroll processes which, once established, become low maintenance activities that don’t suck up valuable resources at the end of each month.

Summary

The arrival of modern digital tools and technologies enables thousands of companies to hire freelancers far beyond their own borders. The inflow of ideas, skills, and knowledge strengthens these companies and helps them to evolve and continue offering products and services their customers need.

New payment solutions also help to run international payroll with only a fraction of resources compared to what it used to take just half a decade ago. Such payments allow companies to focus more on the delivery of their products or services thus freeing up resources for higher-value activities.

The post Managing international payroll in digital industries appeared first on Currency Wave.

Here are seven quick tips on how to manage your business currency transfers:

1. Shop around

Most businesses rely on their bank to send and receive money domestically. Most accounting software supports it, and the process is easy most of the time.

Many businesses also rely on their bank for their international payments too. That’s where things get complicated. Banks usually include high fees with hidden transaction charges which makes it difficult for the business to understand their actual FX costs.

It is prudent to shop around to understand what is offered by other payment providers, as your bank is unlikely to be very competitive when it comes to charges and rates, even though you may have been using them for years.

2. Plan ahead

It isn’t always easy to plan payments, especially in business. However, depending on the type of business, you may find recurring patterns. For instance, a parts manufacturer may know that the demand for their components peaks in August each year. An ice cream manufacturer will know that supermarkets will be ordering more of their product once the summer starts.

Similar payment patterns are likely to be found in most businesses. Changes in foreign exchange rates can substantially affect your profitability. Whether it’s a week or a few months, knowing in advance about an upcoming payment makes it possible to use forward contracts that lock-in the exchange rate and reduce the risk of currency fluctuations.

3. Develop a strategy for dealing with currency movements

Whether it’s a simple time planning for transactions or a more sophisticated approach involving multiple currency pairs, limit orders or forward contracts, creating a currency strategy helps ensure that no unpleasant surprises will happen in the future.

Strategy development may sound unnecessarily complicated and time-consuming. However, your business isn’t on its own when it comes to strategy development. An international payment services provider, like CurrencyWave, would help you understand the available tools and advice on how to incorporate them into your currency strategy.

4. Open a multi-currency account

A multi-currency account gives you more flexibility and control when it comes to the timing of conversions back to your base currency and can be used for collecting payments from customers and for holding balances to undertake natural hedges.

You will also be more likely to save money with cross-border payments, by avoiding unnecessary conversions and the associated exchange fees. A multi-currency account will be beneficial if your payments are frequent or the sums you tend to transfer are high.

5. Understand the volatility of currency pairs and the impact on payments

Some currencies are more stable than others. It depends on the country’s economy, the central bank’s policies, and trade deficit. Whilst it is impossible to control the underlying reasons that affect currency volatility, you can make educated choices that would help to protect your business and its profitability. If your company trades with a country that has a weak political system and rapidly changing economic situation, exchange rate volatility is very likely to be high.

6. Currency exchange impact on Product/Service pricing

It can be easy to overlook foreign exchange transaction costs when setting your product/service prices. You will most likely include labour, materials, transportation, and infrastructure costs as part of your product pricing strategy. However, due to a lack of transparency or a better understanding of FX transaction costs, they often tend to be overlooked.

Such an oversight, especially when trading in counties with less stable and more volatile currency, can be devastating and lead to substantial losses.

Once you start considering international transactions, you may also notice other aspects: contracts with the suppliers or the buyers may not address currency fluctuations, making it even more expensive for you to conduct business with them.

7. Relationship manager

Many payment providers exist that facilitate international payments. Some may even offer the latest online/mobile platforms for your convenience. However, as you’ve already seen from the previous tips, international payments are more than just about software.

When choosing a payment provider, check if you will get access to dedicated help. Here at CurrencyWave, we don’t have a blanket approach to all clients. Instead, we tailor our services depending on your unique circumstances and business needs.

A knowledgeable payment provider should also assist you with your currency strategy to help help you minimise currency risk and route transfers through the most appropriate payment channels.

The post Seven tips for managing your business currency transfers appeared first on Currency Wave.

Four main reasons are often cited behind JIT gaining momentum in Japan in the early 60’s and 70’s:  shortage of cash for  bulk orders, lack of storage space in the country, limited natural resources available for manufacturing, and high unemployment.

By addressing all four constraints, companies like Toyota successfully managed to create robust manufacturing lines that would compete globally in the years to come.

How it works

The concept behind JIT is simple: to have as few inventory items in storage as possible. This way the manufacturer can achieve savings in storage costs and inventory management.

Two different approaches are usually used with JIT. Firstly, orders from suppliers are only placed when the manufacturer receives orders from its clients. For example, aeroplane manufacturers would only order the number of wings needed to complete its latest order from the airline. To continually stock a large number of wings, would be extremely costly and achieve little benefits.

The second approach is when there’s a continuous flow of components to the manufacturing line and the manufacturer only stores enough inventory to last for a few days, or a few hours. This approach is used when there’s a constant demand for the product and accurate estimations can be made on units required each day, month, or year.

Benefits

Main advantages of JIT are balanced cashflow and reduced inventory management costs. Modern inventory and supply management technologies have perfected this process to minutia.

Virtually all basic manufacturing requires substantial amounts of capital to support its continuous operations and ever-growing complexity in engineering. Having little to no costs for inventory storage, companies can better deploy existing cash resources to target other aspects of their business.

By not having to warehouse many items, manufacturers can also better manage risks such as accidents, fire, or natural disasters that could result in stocks being destroyed and immediately impacting its ability to continue the manufacturing process.

Drawbacks

Despite numerous benefits of JIT, it has its drawbacks too. Most manufacturers operate very complex supply chains, where it can take hundreds or sometimes even thousands of suppliers to deliver just in time.

Any disruptions on the supplier side would almost immediately be felt by the manufacturer. It also requires careful vetting of suppliers, as they must be as reliable as possible if a steady flow of parts is be expected.

Sudden increases in demand can slow down the manufacturing process, as suppliers may not be able to match their output to the unexpected demand. The problem can amplify quickly if the supply chain consists of many smaller manufacturers with limited scalability options.

Foreign exchange risks

With continuous flow of components, manufacturers will no longer need or want to make large payments covering long periods. They are more likely to use more frequent intervals of payments (monthly/quarterly vs annually/semi-annually).

Increased frequency in payments may not necessarily match the fluctuations in foreign exchange rates and cost adjustments required by the supplier. For instance, a year’s worth of manufacturing can be planned, and costs agreed on current exchange rate. However, a few months down the line, changing economic circumstances may send a currency’s exchange rate to completely different levels.

In such situations, manufacturers can minimise currency fluctuation risk by using forward contracts. By doing so, manufacturers avoid unnecessary risks and ensure that previously calculated profit margins would remain the same.

Companies involved in low volume, specialised, and expensive product manufacturing may benefit from setting up ‘limit orders’ – an acceptable target rate, where a transaction would automatically be executed upon reaching the target.

Summary

It’s not uncommon for product components to cross multiple countries, where different manufacturing plants would add additional pieces to them before they can be shipped to the end manufacturer. Complex supply chains and advanced inventory management introduce unparalleled operational challenges that must be overcome to have a successful implementation of JIT.

Cross border travel of components and multisite manufacturing of components inevitably requires a robust currency strategy that can be deployed during normal times as well as during times of crisis.  Supply chains in global, interconnected economies require careful planning and timely execution.

Currency strategy is an important part of any successful manufacturing process using JIT, as it helps to achieve more accurate financial planning and manage the risks related to cross-border money transfers.

The post An introduction to Just in Time (JIT) manufacturing appeared first on Currency Wave.

An increasing number of exporters find themselves in situations where they must now negotiate with importers based in less obvious corners of the planet. Companies must also navigate complex cultural and legislative jungles before any shipments can even leave the UK.

Fluctuating foreign exchange rates and the invisible cost of cross-border payments are one of those aspects that can quickly spin out of control if not managed properly. Whether you are a large London based multinational corporation or an innovative, medium sized food manufacturer in the north of England, both are often exposed to similar risks. However, for much smaller companies, tolerable levels of currency risk tend to be much lower.

Supply chain complexity

Up until recent years, many food and drinks manufacturers had simpler supply chains, but that is now no longer the case. The same way that exporters must seek new markets, importers can no longer rely on just EU member countries for their ingredients. The complexity of global supply chains has grown exponentially over the last couple of decades.

Many companies continue to seek competitive advantage by accessing more exotic and often lucrative regions with competitively priced produce and labour. The wider the network of countries an exporter or importer needs to manage, the more sophisticated the currency risk model needs to be. Ever changing situations in foreign countries can overwhelm even the most experienced and quickly cloud their otherwise sound decision-making process. If a company does not closely monitor political and economic developments, they leave themselves open to more risk.

Turbulent times also shorten the timeframe for longer term decisions. It has become increasingly difficult to plan and adjust operational models to rapidly changing situations all over the world. Relying on the grace of your bank may not be a minimal risk solution.

The global economic situation requires companies to be more creative on the sales side, whilst also keeping a more conservative approach towards currency risk modelling. Sometimes even well developed and stable markets can turn into uncharted waters that can be difficult to navigate.

Risk Management

For those companies with long term contracts and predictable order flow, Forward contracts can help in managing longer term currency risk. If, at the beginning of the year, a drinks producer knows that they will have a spike in demand for their best-selling product in summer, they need to prepare for the delivery of the ingredients. During this period, currency exchange rates can change substantially and have a negative impact on the cost of their raw materials. Therefore, by fixing a forward rate to coincide with the anticipated future expenditure, the company can remove this risk altogether.

Sometimes it can be difficult to understand the full cost of an international transaction. It is not necessarily the most attractive exchange rate offered by the company’s bank, or even the hidden cost of the transaction itself, but the lack of advice to the client on what would be best solution in their situation.

CurrencyWave has been helping local companies in Yorkshire and beyond, not just with frictionless cross-border payments, but also by assisting with ways to lower currency risk and reduce the costs associated with it. With such uncertain times ahead of us, it is important to use all the available tools in the box to ensure that companies not only have sustainable operations, but also do not get punished financially when buying or selling their products in foreign markets.

The post Managing foreign exchange risk in the food industry during uncertain economic times. appeared first on Currency Wave.

Many businesses that trade internationally and need to pay international suppliers or invoice overseas customers are often underserved when it comes to financial services.

Jamie Holmes, director of CurrencyWave, says: “SMEs generate as much as 50% of private sector turnover and employ 3/5ths of the UK workforce yet their potential to participate in global trade is often limited by the restrictions of conventional banking. As new trading corridors open up, it’s important that there are no barriers to entry created by cumbersome legacy payment processes.

Take the simple example of a business that exports its products to the USA. They may want payment to arrive in GBP but the customer would prefer to pay in USD. The customer, when sending the payment, suffers punitive FX conversion charges and the funds arrive short after correspondent banking fees are deducted along the way. As well as costing money, this creates a reconciliation headache for the exporter, requiring time wasting manual intervention.”

With CurrencyWave’s new multi-currency account, clients are allocated a single IBAN (International Bank Account Number) that can receive and hold 34 different currencies and pay out in 38. In the case of the US customer, they can send payment to the account using domestic payment methods (ACH or FedWire) meaning expensive cross-border payment charges are avoided altogether and the funds arrive in full and a lot quicker.

Says Jamie: “The whole ethos behind the platform is to facilitate the freeing up of working capital that is so vital to a company’s success or failure in overseas trade. No longer will it be necessary to open up a bank account in another country, so this complex and expensive pain point is removed for all of our clients.”

By providing access to innovative and streamlined payment networks, the company aims to get its customers into overseas markets more quickly and efficiently and help them realise their global ambitions.

The post CurrencyWave launches new multi-currency account appeared first on Currency Wave.

All our customers will be allocated a single own-named multi-currency account number which can accept SWIFT payments and hold funds in up to 34 currencies.

What this means for you

This new exciting feature means you and your customers will no longer need to include a payment reference when sending a payment to your account. A single unique IBAN will be allocated in your name which can be used to accept all your incoming currency payments.

So, whether you (or your customers) send in USD, EUR, HKD etc, it’s the same IBAN number every time, avoiding the need to manage multiple bank account details.

This will mean faster receipt of funds into your account and only one set of bank details to use when invoicing your overseas customers.

FAQs

What about local payments? This one IBAN number does not replace the local payment account details which will still be displayed as an alternative payment method. So, for instance, a local GBP payment using Faster Pay can still be sent to your account using the Starling Bank details.

What do I need to do now?  The new SWIFT settlement instructions will appear on your trade confirmations so you will need to update any internal templates you use as well as our SWIFT payment details on your bank’s platform.

Maximise efficiency – save money All funds are automatically screened and reconciled, so no more time consuming manual processes, saving you time and money.

Can I still use the Currencycloud named bank details? The Currencycloud named accounts will still accept payments using the appropriate payment reference for a period of time. However, we advise updating your settlement details (and your invoices) with the new bank details to avoid any future delays.

What’s next ?

Here at CurrencyWave we are committed to making the whole process of dealing with cross-border payments as efficient and transparent as possible.

In the coming weeks we will be announcing the launch of our SWIFT gpi tool which will offer real-time trace and tracking of outgoing payments at the click of a button. This will allow you to chart the progress of your payments through the global banking system, much in the same way you might track an Amazon parcel delivery.

The post Funding your account just got a whole lot easier appeared first on Currency Wave.

Varying recovery rates

One overarching difficulty with resuming global trade is the variations in recovery rates. COVID-19 manifested itself in waves across the globe. Each country handled it differently, and each will be emerging from their respective lockdowns at different stages. Indeed, some will be re-entering full or partial states of lockdown if we begin to see second spikes.

This raises the question: how can the economy of a country ready to export survive when their trade partners’ borders remain closed?

Freight & Cargo

With a perfect storm of passenger flights quite literally grounding to a halt, a decrease in air cargo, and an increased demand for essential goods and medicines, air freight has become exponentially more expensive since the first nations began locking down. Costs are up around 30% between China and North America compared to October 2019 numbers, and an eye-watering 60% between Europe and North America.

Shipping costs have also increased dramatically, due to fleets of cargo ships being stuck in port, and a shortage of unloading workers. Moving goods around the globe is becoming more possible with each passing day, but the expense is crippling for exporters.

Communication

It’s perhaps an understatement to say that international negotiations can be tense (watch any of the UK’s debates with Brussels if you need a reminder). A major challenge facing the import/export industry is the inability to handle these negotiations in person. It’s much harder to read an opponent’s expression over Zoom, or to gauge tone or intention in a black and white email.

All is not lost. There are ways and means of coming through this global disaster, and an array of potential catalysts and solutions are available to governments and corporations:

Transparency

The World Trade Organization and the Organisation for Economic Co-operation & Development (OECD) prove their worth in situations like this. They are crucial overseers for policy change across nations, and each nation has an obligation to advise them of changes in importing/exporting policy. Together, these organisations can create a neutral, shared, and totally transparent base, from which individual nations can establish deals and mechanisms to keep trade going.

Trust

In the face of a global recession, trade must continue in order to mitigate loss. The key to ensuring this is trust. An exporting nation must be assured they will not be bound by unexpected restrictions; an importing nation must be assured there will be no health risks attached to the goods they receive. The phrase ‘the rules were made to be broken’ does not apply here. Nations must work more collaboratively than they ever have (or at least since certain World Wars the pandemic is oft compared to).

Health & Safety

All of society is now so thoroughly programmed in the discipline of health and safety, this one almost goes without saying. But as we get better and better at wearing masks, washing hands and socially distancing, international trading bodies are learning how to quarantine imported food, implement ‘biosecurity’ practices without being unnecessarily restrictive, and deploy daily testing of on-site workers. By making these measures a mainstay for the foreseeable future, we can find a way to resume profitability without endangering workers or the general public.

Taxes & Tariffs

An essential element to keeping trade moving is ensuring imported goods can actually be afforded by the end consumer (the proposed VAT cuts providing a promising example), and can be paid for safely, via the provision of e-payment and contactless systems.

To sum up

No one is under any illusion that we’re out of the woods. Now, a question mark hovers over the superpower that is America as it loses grasp on infection control, portending inevitable repercussions for its trading partners. Second spikes are occuring in concentrated areas of the world. But necessity is the mother of all invention, and our capabilities for innovation, adaptation and agility are considerably more powerful than the last time a pandemic swept the globe. This is an opportunity for nations to sing from a single hymn sheet and achieve a new kind of unity as we navigate a new post-virus world.

The post Key Issues For Import/Export Businesses Post-Lockdown appeared first on Currency Wave.