Small and medium-sized enterprises

International Payment Solutions for
SMEs to PLCs

SMEs to PLCs that operate internationally are exposed to currency market risk. Failure to have a strategy against these exchange rate fluctuations could result in the cost of vital international payments spiralling out of control, damaging your bottom line.

Combining specialist tools to make a real difference

Because every business has a unique set of international payment requirements, there’s no ‘one size fits all’ approach to protecting profit margins from currency market risk. We can use our knowledge and experience to help clients create a tailored currency strategy that combines a suite of FX products and tools that will help your business to plan against a range of eventualities.

How we helped a UK SME to implement a comprehensive currency strategy

The Requirement

A UK construction company needs to pay their European suppliers each month. The monthly cost varies, depending on the value of the order. The client wants to have the most favourable exchange rate but is also concerned about losses.

Our Approach

Our team created a FX currency strategy that incorporated forward contracts, limit orders and a stop loss product.

This carefully crafted strategy implemented a ‘30/40/30’ approach; 30% of the invoiced amount was placed on a forward contract, 40% on a stop loss and the remaining 30% was placed on the open market using a limit order, leaving open the currency open to book if rates improve.

The Result

If the pound gains against the euro, the client can benefit from the improved rates, with only 30% of their payment booked on a set rate with a forward contract. Because the rate has gone in the client’s favour, the stop loss won’t be triggered, and they have 70% of their funds to send at the improved exchange rate.

If market movements do not go in the client’s favour and the euro gains against the pound, then 70% of their FX exposure has already been covered thanks to the forward contract and stop loss products. This means there’s only 30% of the funds left to book on a spot payment.

get started or find out more

RationalFX have helped over 5,000 businesses to manage their international payments and mitigate their currency risk exposure. We ensure your funds arrive where they need to be on time whilst maximising profitability. 

Interested in working with us? Speak to one of our corporate currency specialists on +44 (0) 20 7220 8182, open an account or request a quote and one of our team will be in contact with you shortly.

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