8 Ways to Save Time and Money - Part 3: FX Assessment

Full disclosure: This article really has nothing to do with Dynamics AX or Dynamics 365. But if you want to learn about a way to save money if you have any foreign currency transactions, then keep on reading.

So, a few months ago we had a person come into our Denver office and talk about FX Assessments and services. I will be honest with you, I went into the meeting feeling like it would probably be a waste of my time and I was not likely to get any value from it. I left the meeting pretty surprised and much more educated about the entire Foreign Exchange transaction process.

I actually kind of feel like a bad person for not sharing this sooner because it can be so valuable. Our research has shown that 83% of businesses are leaving money on the table with their foreign currency transactions. That's a lot of business. Most businesses also have no idea that they are doing this or how much they are losing. 

This might make you ask why? I did not realize this, but I learned that banks very commonly increase their foreign exchange rates to cover their costs, overheads, and so on. Sometimes they may only be increasing by a 10th or even a 100th of a percent. Depending on the size and quantity of transactions you are performing along with the transaction fees that your bank slapped on top of the exchange rate, this could be thousands of dollars. To add to this, organizations often times erroneously focus on fees implemented by their financial institutions instead of the “spread”.

We have partnered with a company that literally only does foreign currency transaction hedging. The benefit to you is often times a significant cost savings because they don't have the overheads that your financial institution does - and you get full visibility into what you are paying.

FX Assessment

At a high level, the approach we take is to examine your foreign exchange treasury function from five perspectives:
  1. Value – Does your currency trading firm provide adequate value relative to the cost of its services?
  2. Capability – Does it have the right technology and infrastructure in place to meet your needs?
  3. Alignment – Does it specialize in private equity and middle market companies?
  4. Risk – Have you accurately quantified your currency exposures and taken the proper steps to manage the associated risks?
  5. Innovation – Is your current firm proactively generating ideas to improve inefficiencies in this part of your business?

The best part about all of this is that you can take our questionnaire online here to see if you may qualify for these services. The actual FX Assessment is done at no cost to you, and we will spell out what your potential cost saving is based on the information you provide to use during the assessment. So, I would say what do you have to loose?


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