The FX-Files: Secret Treasury Alternatives to Global Bank Accounts

08-03-2022 | Ernie Humphrey | treasuryXL | LinkedIn |

When businesses engage suppliers across new cross-border frontiers, many assume that they need a separate bank account to make payments. Even the most seasoned treasury professionals assume they need foreign bank accounts or need to manage relationships with providers of foreign exchange currency services to make payments across international borders? Is there a better way?

I recently spoke on a webinar where we discussed the challenges of international accounts payable, and the value in investing in AP automation from supplier on-boarding to making international payments via one payment file which is funded in US dollars and affects payments to suppliers in multiple currencies.

The business case for investing in AP automation is multi-dimensional and compelling for companies of all sizes. International AP automation done right empowers top line growth by impacting productivity within and beyond the AP department and improving working capital by facilitating supplier relationships that allow companies to take more control of how and when they make payments. International AP automation also mitigates invoice processing costs which are inherently inefficient due to the number of people. processes, and systems involved in processing an invoice, let alone one denominated in a foreign currency.

Pain points for accounts payable, which are magnified by international accounts payable include the following:

  • Supplier On-Boarding– a supplier relationship starts with onboarding. This can make a great impression on a new supplier or be the beginning of ongoing friction with a supplier.
  • Supplier Communications– effective communication is key to effectively managing supplier relationships. Asymmetry of information (can your supplier see what your AP team can see), and a lack of visibility into supplier activity and conversations leads to unnecessary disputes and hours spent on the phone resolving issues (many of which are perceived rather than actual and could have been avoided)
  • Information Exchange– pushing paper back and forth, especially across borders, leads to inefficient communication and represents a significant inherent barrier to effective AP processing in terms of how long it takes and how much it costs to process invoices.
  • Invoice Processing Time– the more it takes to process an invoice the less opportunity to take and negotiate payment discounts. Efficient invoice processing enables financial agility in terms of controlling when suppliers are paid and improves working capital management
  • Payment Timing– time is money. The more control a company has over when they pay suppliers the better. More control of the cash conversion cycle should translate into a positive impact on the bottom line.
  • Tax, OFAC & FCPA Compliance– doing business across a new international border can create tax, legal and regulatory compliance exposures. A failure to manage these exposures effectively can do quite a bit of damage to the bottom line.
  • FX Risk Exposures– new liabilities in currencies other than the functional currency of your company either create new FX exposures or impact these exposures. A failure to effectively manage FX exposures show up in the “FX gain/loss” line of a company’s income statement.

The value proposition for investing in international accounts payable is evident in how many ways international AP done right impacts the bottom line:

  1. Mitigates invoice processing costs & the payment of duplicate invoices
  2. Mitigates time spent resolving supplier issues/disputes
  3. Allows discount opportunities to be captured
  4. Facilitates early payment program opportunities
  5. Impacts the productivity of employees processing invoices
  6. Mitigates payment processing costs
  7. Rebates from commercial card payments
  8. Improves working capital management
  9. Impacts the productivity of employees approving & affecting payments
  10. Mitigates FX Risk Exposures
  11. Mitigates the Cost & Complications of International Bank Relationships


If you want to learn more about how to leverage automation to manage international accounts payable, including how your company can affect international payments by funding one amount in USD, I invite you to experience the recording of The FX-Files: Secret Treasury Alternatives to Global Bank Accounts webinar.



Ernie Humphrey
Seasoned Treasury Expert
& CEO Treasury Webinars