Many importers, whether they call themselves importers or not, have to pay a deposit on certain goods before they can secure production.
The remaining balance is then due before shipment.
Consider, if the rate of exchange changes minute by minute, how do you make sure that the deposit you pay is exchanged at the same rate of exchange as the subsequent balance amount you send when, as far as paying the amounts is concerned, they are sent as two separate payments?
The answer is simple:
Buy the whole amount you require but send only half.
"But, 'we do not have a euro account so where do we keep that remaining 50% between when we buy and when we want it sent" we hear you say....
...again, the answer is simple:
Buy all the currency through Prime Cap and hold the second 50% as a foreign currency balance on your facility with us.
We consider the buying of currency as separate to the sending of an amount.
So, with our simple online tools you can lock in the rate of exchange on the entire purchase, but, hold the amount you do not want to send in a secure, segregated client trust account until it is owed to your supplier.
In fact, if you think the rate suits your objectives...for instance if it is currently slightly better than you had budgeted for, you can either buy an amount of foreign currency in anticipation of invoices coming in and payment needing to go out, or, you can negotiate terms whereby you lock in a rate of exchange for use much further down the line.
A number of our clients lock in a rate now so that they can more accurately forecast and work with a fixed rate for their calculations and then send us the equivalent GBP amount of the foreign currency sum they wish to pay out at the point which the payment is required.
Our systems allow an appointed signatory to buy currency for a business and then grant permission to an accountant or book keeper to login and send payments as required.
Tiered 'permissions' enable business owners to work directly with live market rates and then delegate the use and disbursal of those funds as and when the invoice needs settling.
This feature is not something your bank can accommodate.
The ability to search our system for specific beneficiaries means that you can monitor and assess the payments you make to your supplier on an itemised basis and also report on and monitor your actual currency spend.
Knowing how many euros or dollars you buy or hold helps support the case for setting up more sophisticated internal systems that support you growth and oversight capabilities for the longer term.
If you don't already use an 'online system' for your currency payments take a look at our simple 'How to...' guide.
It is a simple talking through the use of our online system...and goes hand in hand with a more detailed chat with our team about how to truly improve the way you send, receive, hold and exchange currencies.