Do You Need Multi-Currency Features in Your Accounting?
What is a Multi-Currency Business Account?
A multi-currency business account allows you to manage various currencies when you buy and sell products and services outside your local market. Possessing a business account that can only manage one currency can disadvantage you in areas such as your business profits and therefore can potentially influence your business performance due to high fees and transaction complexities. Here are the benefits of having multi-currency features in your business account:
- Reduced Transaction Costs
If you carry out business internationally, you may find that you possess different bank accounts for separate currencies. Typically, banks charge a fee when a customer is using an account, therefore using multiple separate accounts can lead to additional fees and possibly hidden charges, whereas a singular multi-currency business account can help cut down unnecessary costs by only charging one fee.
- Management of Foreign Exchange Rates
In the case where your bank account only recognises one type of currency, if you are to receive a different currency, there may be instances where the exchange rates may or may not work in your favour. As this may be a difficult issue to manage without a multi-currency account, it is important to bear in mind to beware of major marketplace platforms that force you to convert money through them, this can result in you paying much more than the market rate. When managing foreign exchange rates with a multi-currency account, you may find it similar to a holding account, you can wait until you have a good exchange rate before converting from one currency into another. Additionally, if you have sufficient funds, you can also manage supplier payments by buying currency at good rates and storing it in your account for future use.
- Ease & Convenience
Control and ease over managing your finances are vital to ensuring a successful business, this is especially beneficial for those that are involved with international business and receive multiple currencies. Not only does possessing a multi-currency bank account make receiving and buying items easier, but it also allows the process of administrative duties such as reconciling invoices and receipts to be simplified, this is because all the financial information you need is all easily accessible in one account, resulting in you being able to keep track of your receipts and disbursements conveniently.
- Increased Turnaround Speed
Cross-border payments can take time and are not as efficient as local payments. As turnaround speed is crucial for a positive cash flow forecast, it is important to keep this in mind. It is especially beneficial to consider also downloading an app on your mobile to increase the speed and convenience of making transactions.
- Stronger Relationships with Customers & Suppliers
Being able to accept payments in the form of various currencies allows you to appear more flexible to customers, and it also ensures that you do not lose potential customers that prefer to pay in their local currency. As when your customers are happy with your payment method, you’re more likely to get repeat business. Similarly, some suppliers that are based overseas may prefer you to pay them in their local currencies. Being able to accommodate their needs can result in you being able to form better relations with them, not to mention, you may find it easier to network internationally with suppliers, making finding affordable deals much easier.
Is a Multi-Currency Account Right for You?
If you currently carry out business internationally or plan to start networking internationally, having a multi-currency business account is ideal for you! Not only is it quick and convenient for you, but also the people you work with. Additionally, it also allows you to easily be able to carry out business with a global customer base and can help you reach new heights in expanding your business beyond local markets.
When In Doubt, Reach Out!
Need help setting up a multi-currency account? Sprout’s got you covered. Our budget-friendly bookkeeping packages are flexible enough to be customised to meet your single currency or multi-currency needs. Still unsure about what is best for you? Sprout is happy to offer advice on the most suitable option for you based on your company's needs. If you have any queries, feel free to reach out to us. We’ll respond within 24 hours.