Accountants Guide to Foreign Exchange

August 13, 2022

In most businesses, the accounting team reviews foreign exchange needs to evaluate strategies to manage risk better and find opportunities to improve the bottom line. The likelihood that your business finds clients, suppliers or vendors cross-border is high for Canadian businesses, given the opportunities we see for international expansion as a business growth strategy. However, navigating different currencies can add complexity to the accounting process for a business. Currency exchange is a volatile market and requires some forethought to maximize the opportunity.

We work with accounting teams daily, helping them manage foreign currencies and have put together a guide with the key steps for accounting professionals and business owners managing foreign exchange.

Our guide for accountants includes:

Creating an FX management plan
Determining your FX management solutions available
Streamlining your currency exchange workflow

Step 1 - Create an FX Management Plan

Your foreign exchange risk management strategy can mean the difference between profit and loss. If you’ve signed contracts for payments or receipts in foreign currencies, your business will be exposed to potential currency fluctuations over the year or within a single day. In 2022 we are seeing large volatility in the currency exchange market, which requires businesses to keep an eye on upcoming foreign currency needs to time the FX exchange at the most favourable timing.

The first step is to map out your annual FX needs.

Do you regularly buy from a foreign vendor?
Are you currently paying for USD software?
Or have a supplier that requires an international wire transfer?
Do you pay contractors in other countries?
Are you currently using your Canadian business credit card for foreign currency transactions?

Make a list of annual needs to total up your foreign exchange requirements and the frequency of these payments. Smart management of this total can save your company up to 3% in the cost of currency exchange.

In Canada, businesses such as marketing agencies, film production companies, VFX studios, gaming studios, mining, software, IT, healthcare and engineering companies benefit from an FX Management Plan.

Step 2 - Determine Risk Management Solutions & Support

Protect your profits with smart FX management solutions

If you’re an international business, you likely identified that you need a foreign exchange risk management plan to ensure your cash flows run smoothly. This responsibility can lie with your accountant, controller or the business owner or is likely to be shared amongst all three. You already know that risk management is essential to your success, so choose a foreign exchange partner who understands your exposure.

What are your options for each payment type or incoming funds? Depending on the frequency and amount, you have options. You need to have a predictable cash flow while being able to profit from advantageous currency movements.

You are busy running your business and managing your daily Accounts Payable and Accounts Receivables and may not have time to watch the FX markets closely. That’s why VBCE offers a variety of products, so you can choose the level of exposure that’s right for your business. More importantly, we partner businesses with a dedicated VBCE FX Trader who understands your needs and works with you to get the best rate when needed.

Dedicated FX Trader whom you can speak to and work with to strategize your FX management options for your business.
VBCE Traders provide daily, weekly or monthly market updates for up-to-date market analysis when needed.
Secure transfers internationally at a competitive rate, including international money transfers and wire payments. Our rates are better than the bank.
Spot market trades for instant access to 80+ currencies around the world
Hedging strategies with open or fixed date forward contracts to help manage your daily foreign expenses and lock in prices for accounts receivables or goods.
Efficient payment and settlement options by phone or 24/7 online access

Step 3 - Streamline your currency exchange daily workflow

We work with accounting teams daily and understand how to support their operations regarding exchanging funds worldwide. As busy professionals, you must complete tasks easily and know that you received the best currency exchange rate. An online option for recurring transactions helps make access to transactions easier and more convenient. VBCE Online allows access 24/7 to market trades with options for funding and payments in a secure platform.

The top reasons accounting teams like working with the VBCE Online Platform include:

Help with onboarding - For recurring payments or incoming revenue, we offer an online platform accessible 24/7 that is easy to use and comes with one-on-one training from a Canada-based team member during the initial onboarding process.
Confirming bank details - We help set up your payees and confirm the bank details before your first online transaction.
You can speak to a customer service representative experienced in worldwide currency payments and receivables. Our team is based in Vancouver, BC and is here to help you.
Clear transactional records - Our transaction receipts share the details of each transaction and are easily accessible for accounting recordkeeping.

Best of all, we have a team of experienced currency exchange professionals who can answer any questions and confirm details for wire transfers and international payment details.

The best investment for your business starts with a trusted FX partner.

As a Canadian-owned and operated business, VBCE works with Canadian entrepreneurs daily and understands their needs for currency exchange, helping them get the most out of their currency exchange management to stay competitive and profitable. We have over 30 years as a currency exchange firm managing over 5 billion dollars in annual FX trades. We enjoy building long-term relationships with our clients as they grow their businesses.

It’s free to speak with a VBCE FX Trader to begin understanding how you can benefit from a dedicated expert. Our FX Traders work with businesses across industries and with Accountants and Controllers daily, supporting their worldwide currency needs from vendor and supplier payments to staff payroll and contract payments. We can help you develop a foreign exchange risk management plan that suits your unique needs.