How We Help Exporters – A Scenario

Posted Under: News

If you’re running a manufacturing company that exports products internationally, you’ll want to have a low-cost and simple system to keep you and your customers happy. 

Imagine you’re the CFO of a company that manufactures wind turbines. Your company is responsible for exporting wind turbines to Denmark. Your Danish clients receive the invoice in Danish Krone (DKK). However, exports to Australia are invoiced in USD. 

You’re happy with your sales revenue, profits earned, and inbound cash flow. Your company is on a budget with expenses and slightly ahead of the curve with sales. However, to your dismay, you were unaware of the fact that you could have generated more income. 

Your company has banking relationships with both a regional and global bank. Both of these banks have branches close to your office and factory. The larger, global bank is able to collect DKK from Denmark which they immediately convert to USD. Both banks have been used in order to collect USD from Australia. 

You probably didn’t realize that many of the larger banks are keeping margins wide because they rely on customer apathy. Now you’re losing money.

Unfortunately, as the CFO, you were not getting the level of advice and guidance from your bank that you deserve and need in order to operate more efficiently. Your bank never advised you that it is beneficial to invoice your Australian clients in AUD.

By opening a DKK currency account and switching your receivable flows to GreenShootsFX, your company was able to get an improved foreign exchange rate that increased your USD inbound flow by approximately $2,500 for every $100k of sales. 

Through converting USD to AUD invoices, not only did your company collect more USD, but it also became more competitive since the importer could now easily compare prices against other companies offering their prices in AUD.

Your company has now been introduced to Window Forwards. This allowed your company to hedge your receivables up to a year in advance and therefore take advantage of FX rates before a strengthening USD eroded profit.

Even if your company is the sole manufacturer/exporter of this product, invoicing in AUD will likely lead the importer to buy sooner rather than delaying a decision to purchase, therefore improving your company’s cash flow. 

With our services, your company increased revenue and had less reliance on bank credit facilities to support cash flow, further reducing expenses. If you don’t want to miss out on tens of thousands of dollars in income, contact us today and become more knowledgeable on the importance of FX rates.