Multinational businesses often face the challenge of managing multiple currencies in one account and complex financial systems. This can be a difficult thing to do, especially if you don’t have experience or knowledge in handling multinational accounts.
To help address this pain point, businesses must open a multi-currency business account. It is exactly what it sounds like—an account that lets you handle several currencies at once. This article will discuss why your company needs one and why it’s such an important tool for international businesses.
What Is A Multi-Currency Business Account?
Multicurrency business accounts are a great tool for companies that need to conduct business across borders. They allow businesses to access their money in multiple currencies, which means they can avoid the risk of fluctuating exchange rates and make payments at the most advantageous rate.
A multi-currency business account like Airwallex is an online bank account that allows you to store your funds in different currencies from one place. You can create separate sub-accounts for each currency stored within this main account, so you don’t have to worry about keeping track of multiple accounts or transferring money between them. Your multi-currency firm will then convert your funds into another supported currency before making payments on behalf of your firm – saving time and effort while ensuring accuracy thanks to live rates provided by major global financial institutions.
Reduced Transaction Costs
This is one of the main reasons why you should use a multi-currency account. Let’s say your business sells goods and services in dollars but receives payments from customers in different currencies. You need to convert the money from these payments into your currency so that you can make purchases of inventory or pay salaries.
Every time you convert foreign currencies into dollars, there’s a transaction cost involved. It costs money to buy or sell currencies at an exchange rate specified by banks. This is known as a transaction cost, and they are anything but cheap; they can amount to hundreds or even thousands of pounds a week! A multi-currency account will help minimize these costs by streamlining all your transactions.
Easier And More Convenient For Handling Payments
You can send and receive payments in multiple currencies. A multi-currency account gives you the flexibility of managing your cash flow through different currencies according to the needs of your business. For example, if you have a business based in Australia that sells products in the United States and China, it would be more convenient for you to manage your business using US dollars, Chinese yuan, and Australian dollars rather than holding accounts in each country separately. This way, making payments to suppliers or customers, as well as other transactions such as payrolls and taxes, can be done on one account instead of three separate ones.
Stronger Supplier Relations
Your business will benefit from this account if you have suppliers in more than one country. It allows you to pay them in their local currency and reduce the exchange risk between your currency and theirs. You can also use it for supplier payments made in multiple currencies, which is a convenient option for businesses that operate across borders and need to pay their suppliers in different places at different times.
Additionally, some multi-currency accounts offer access to trade finance products such as factoring or invoice discounting. These products make it easier for you to access larger amounts of working capital when necessary without relying on traditional bank loans or overdrafts that may be difficult or expensive to obtain.
A Streamlined Process
A multi-currency account will streamline many of your business processes, allowing you to:
- Process transactions faster. Multi-currency accounts give you the ability to initiate and approve payments in multiple currencies all at once, which means you can reduce operational costs by streamlining your processing channels and improving efficiency.
- Manage your cash flow effectively. A multi-currency account allows you to manage your cash flow better because it allows you to create payment orders in different currencies on the same day, allowing for better management of funds across multiple accounts (such as credit cards or bank accounts).
- Track your payments. With a multi-currency account, it’s easy for a business owner or executive to see all the information associated with each payment order—including where the money is coming from, how much is being sent out into foreign markets, and where those funds are going when they leave their domestic market.
Better Customer Experience
If you accept payments from customers in different currencies, you can make life easier for them. They won’t need to calculate the exchange rate or pay an additional fee when they use their local currency.
In addition, if your business accepts online payments, your customer will automatically get a calculation of the equivalent of what they need to pay. This deeply engrained versatility will ramp up your competitive advantage as your clients will probably like the fact that they can get served in their currency of choice.
Simple To Manage
The fact that you can manage your multi-currency account from anywhere, at any time, and on any device is a huge advantage over a standard bank account. You don’t need to book an appointment with someone at the bank or go into one of their branches to complete certain tasks.
You can do it from the comfort of your own home or office, even when you’re on the go. This makes it much easier for small businesses that often have no regular office hours, making it possible for them to access their money 24/7 through an online platform that has been specifically designed for this purpose.
If you’re a business owner, you know that having options is important. The more choices you have, the better your business can operate. The same goes for money; having multiple currencies can help your company grow and thrive.
A multi-currency account allows you to hold multiple currencies in one place, so it’s easy to manage them all at once. The best part? You don’t have to spend extra time converting between currencies when making transactions – everything happens automatically!