Are you an entrepreneur on your way to building the next international business empire?
It’s now become easier and cheaper than ever to connect with suppliers from around the world, and sell your products globally. But if you’re operating your finances from a business account that only supports one currency, sooner or later you’re going to get tired of dealing with slow processes and high fees when making and receiving payments to and from your international customers.
Thankfully, the solution is simple. Read on to learn the benefits of a multi-currency account when you’re running a cross-border business.
1. No more funds lost in currency conversion
Using a multi-currency account with local payment instructions allows you to pay and receive funds as a local.
In other words, there is no money lost to currency conversion – which is the case when your international customers have to make transfers to an account in a different currency. Your customers in Europe can pay you in euros, and your customers in the US in dollars. In turn, you’ll be able to pay any contractors or suppliers in, for example, Europe directly from your EUR account.
As you expand and grow your business, and revenue volume increases, using a multi-currency account is going to save you a great deal of money.
2. Avoid hidden international transfer fees
Here’s a common scenario for many international traders: a customer told you they’ve paid you €1000. You check the conversion rates of your bank, but even after the conversion fees, there seems to be €100 missing. You contact your customer to double check the amount they sent, and they get back to you with a screenshot of their online banking that shows they definitely sent you the €1000 in full.
Usually, it has to do with hidden international fees, taken at various points of your transfer.
The receiving bank in Hong Kong may have taken a small fee for receiving the international transfer, but this is usually no more than around HK$50. The rest of the amount in this example are usually fees that are taken by middlemen, so-called intermediary or correspondent banks. Many banks use a network of partner banks to help them make international transfers around the world, and these partner banks often charge fees that aren’t usually transparent to the customer.
By doing business with a multi-currency account - especially one that provides you with local payment instructions - you can avoid all of this confusion, and receive all your money in full.
3. Offer a better experience for your customers
As entrepreneurs, most of us aim to delight our customers, and give them a streamlined and uncomplicated customer experience.
The last thing you want is to force your customer to go to a bank branch in order to pay you, and go through a complicated process of making an international payment (that’s likely going to also cost them money)
In the worst case, the customer may get confused by account numbers that are formatted differently than in their home country and the transfer will never arrive and bounce back to their bank account later.
By providing payment instructions they’re familiar with (a.k.a. in the same jurisdiction as your customer), you’re making it easy for them to pay you, which ultimately leads to happier customers.
4. Receive payouts from the local platforms your customers use
When you’re selling on say, a European marketplace, or work with certain payment gateways, they may only support paying out within Europe. By using local payment instructions, you’re no longer restricted to only using the platforms that can pay out to accounts in your country. Getting a multi-currency account means you can get paid like a local and will be able to sell your items through more platforms your customers are on.
5. Manage all your accounts from one platform
An alternative to getting a multi-currency account might be to open multiple bank accounts in different jurisdictions. The challenge with this is that banks may not always be able to open an account for companies incorporated outside of the bank’s location. Even if they are, it takes time and effort on your part to apply, and then more time as they review your application.
On the other hand, a multi-currency account gives you access to multiple accounts in different jurisdictions, without the hassle of juggling multiple banks and applications. What’s more, you can have an overview of your company’s total funds in a glance, instead of having to switch back and forth between all the dashboards of different banks and calculating it yourself.
When you manage everything from one account, it’s also just a whole lot easier to keep track of your income and expenses.
6. Ease your reconciliation & accounting processes
With a multi-currency account, your end of month accounting becomes a whole lot easier.
As we discussed before, often when you receive international transfers, the amount you receive may be a little different (a.k.a. less!) from what you expected. Moreover, some of your customers may use remittance companies to make international transfers, which means the remittance company’s name will be shown as the sender, and not your customer’s name. You may have asked your customers to use reference numbers, but not all of them always do, or the message may not be passed on correctly. Especially if you receive a high volume of bank transfers, you may end up wasting hours each month on trying to reconcile your payments.
Using accounts denominated in the same currency as your customers’ can make this process a lot easier and allows you to spend less time figuring out the details of your accounting, and more on growing your business.
7. No more waiting times
International transfers take time – it’s the truth we all know and hate.
When you’re running your own business, you’re moving quickly. You don’t have time to keep checking in to see if that large payment you’re counting on has finally arrived in your account.
Using a multi-currency account in the same country as your customer means that you no longer have to wait days for your payments to go through.
Open a multi-currency account for your business
A multi-currency account is a must-have for any entrepreneurs looking to grow their businesses globally – and we’re happy to say that if that’s you, we’re there for you.