BCR Publishing
We are the leading provider of news, market intelligence, events and training for the global receivables finance industry.
Working with industry leading organisations, experts, governments and universities, BCR Publications delivers expertise in factoring, receivables and supply chain finance to a global audience.
BCR has long been a beacon of innovation and excellence in the realm of receivables finance, playing an instrumental role in shaping the industry’s international landscape. Through its comprehensive conferences, insightful publications, and thought leadership, BCR has facilitated crucial dialogues and connections among industry professionals, driving forward the development of receivables finance globally.
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8 reasons why you need to invest on the Dutch NPEX stock exchange
03-08-2020 | NPEX |
The NPEX stock exchange brings entrepreneurs and (institutional) investors together for financing and returns.
We share 8 reasons why you need to invest on the Dutch NPEX stock exchange.
Blog and whitepaper continues in Dutch language
In 8 redenen vatten we samen waarom beleggen via NPEX voor u als belegger interessant is.
Download de gratis whitepaper en lees over alle voordelen.
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Are There Risks to Conducting International Business in USD? (Part 1 of 2)
30-07-2020 | treasuryXL | XE |
American corporations often transact their international business in USD because they believe it eliminates FX risk. Unfortunately, this is a false sentiment.
When it comes to international business, American companies have a global advantage. The U.S. dollar (USD) serves as the world’s reserve currency. This has created a global demand for dollars and led to certain industries (e.g., energy) being globally priced in USD. Because of the USD’s global status, many American companies transact all their international business in USD—but this may not always be the best move.
American corporations—particularly smaller and middle market companies—often elect to transact their international business in USD because they believe it eliminates foreign exchange (FX) risk. Unfortunately, this is a false sentiment.
Pricing transactions in USD does not eliminate FX risk. Instead, it merely transfers it to the trade partner, because the trade partner most likely operates under a different functional currency.
When to Price in USD
When deciding whether to transact in USD, a company needs to examine its business operating environment. There are instances when pricing international business in USD is a valid strategy for a U.S. company.
Two examples of this are:
Industry standard: certain industries have long-established USD-functional supply chains. Some examples of these industries include aspects of energy, agriculture and aerospace.
First-time global traders: new entrants to global trade have other risks to prioritize over currency risk (such as counterparty risk, quality of goods, shipping, payment, and more).
Why Do US Businesses Price in USD?
Even though a vast majority of industries are not globally USD-functional, many American companies still transact their international business in USD.
The most common reasons cited for this include:
Perceived FX risk avoidance
Ease with current process
Internal system incompatibility
This set of circumstances falls under managerial influence. A company that continues to transact global business in USD under these reasons has made a business decision that the ease of transacting in USD outweighs the potential benefits of transacting in local currency.
However, what these companies need to understand is that transacting their global business in USD can also come with hidden costs or risks.
The Cost of Pricing in USD
American companies transacting globally in USD may be exposing their business to potentially higher costs or reduced sales and margins.
Why?
Because their trading partner is most likely not USD functional, making the USD payable or receivable a foreign currency to that company. The foreign company will need to be compensated for absorbing the FX risk; to do so, they will likely “pad” prices to U.S. importers or demand price discounts from U.S. exporters.
Industry studies estimate the cost to U.S. businesses can range from 2%-10%. Importers face inflated pricing and payment delay risk. Exporters face uncompetitive pricing, reduced margins, possible payment delays or, worse, potential lost sales.
Management Taking Control
In a globally competitive marketplace, it is prudent for a company to question why it transacts its global business in USD. Is it industry standard? Or a lack of internal knowledge and inadequate systems?
As companies strive to grow revenues and reduce costs, it is possible that transacting business in USD is having a negative effect. Is the purchasing group overpaying for goods? Has the export sales team experience lost sales to competitors pricing in local currency?
At Xe, we work every day with companies doing international business. We understand the challenges companies face when transitioning to pricing their international business in foreign currency. Wherever your business is on this transition journey, the Xe Corporate Team can be your partner and help your company manage the FX risk component of international business. Visit our Business page for more information about our products and services.
To learn more about the costs to American companies for transacting in USD, understand how this impacts importers and exporters, and see some solutions other companies have tried, stay tuned for the Part 2 in this series.
Get in touch with XE.com
About XE.com
XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.
Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.
Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.
Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.
Visit XE.com
Visit XE partner page
Rent a Treasurer – Joint Venture treasuryXL & Treasurer Search
| 29-07-2020 | treasuryXL | Pieter de Kiewit
Organisations with treasury exposure, without the expertise. The ones of you who know me longer, know this is one of my favourite hobby horses. For a longer period of time I have been tinkering with many plans to help the aforementioned organisations. This led to contributions to treasuryXL as a community and educational institutes like the Hogeschool Utrecht and the Vrije Universiteit. Now we will work on the obvious: bringing highly skilled treasury interim managers to organisations without a treasurer.
Impact on SME’s
Treasurer Search has a long and solid track record in finding interim treasury managers to large organisations with a corporate treasury function. One of our team members reaches out on a continuous basis to these managers to ask them about their availability, skills and preferences. Many of these managers love to work in smaller size organisations. There they can have real impact, save costs, mitigate risk and create opportunities.
Target audience treasuryXL
One of the important target audiences of treasuryXL is the group of CFOs, group controllers and entrepreneurs who, consciously or not, deal with treasury topics. In the content distributed on the platform the following is taken into consideration: non-technical treasury information on a regular basis with a clear upside-story. The communication channels that are used are also the ones that hardcore treasurers might not tune into but other financials do.
Rent a Treasurer
All the pieces of the puzzle have been on the table for a long time. The plans have been there for a long time and now we will act. As Ben Tiggelaar states: “the gap between plans and success is action”. Through treasuryXL you can “rent a treasurer”, click the link for more information about the concept.
Thank you,
On behalf of Treasurer Search, Pieter
On behalf of treasuryXL, Kendra
Pieter de Kiewit
Owner at Treasurer Search