The comment we hear time and time again from the finance folks at businesses that import is….
“I’m fine with my current provider”
This might be true. After all, if you’ve never shopped around then you could be under the impression the service, products, and pricing are all that’s available to you. In addition, you might also convince yourself that you really are too busy, what with the 50+ items queuing on your to-do-list.
And if you’re used to buying products and having your Accounts Payable team settle the invoice in dollars, and it appears to be working fine, then why rock the boat?
I had an interesting conversation with one of our referral partners recently when they asked how much in cost saving would it take for someone to consider moving away from paying in U.S. dollars and instead settle invoices in the currency of the vendor.
For me this is a subjective situation. We’ve had companies become clients because we save a couple of hundred bucks each month, and we’ve had prospects turn us down because $5 million in expense reduction would hardly be noticeable to the bottom line!
And then there’s the perception of what change really means. Additional keystrokes, a different way of doing what had become so familiar, a new phone number and email to learn? Oh the stress!
Not bizarrely, the human brain is rather good at adapting to change. It would be like giving up meeting any new people because your brain couldn’t cope with having to remember yet another name.
But before we move on, let me throw out an anecdote from last year. Despite it driving us crazy that we can clearly see the significant cost savings we bring to the table, and for little to no effort on a company’s part, whenever I’m offered a discount at a store for taking out their branded credit card I always….ALWAYS…say “no”.
Because what’s it REALLY going to save me? And, I just don’t have time for this!
So, last year after taking on the challenge of building the best treehouse my son had ever seen, I set off to Home Depot. Having spent some time gathering what I felt I needed I took my place in the line to pay and while standing there idly and patiently waiting one of the store team members was asking each person if they wanted to take out a store card for a 20% discount on today’s purchase.
When they arrived at me I waived them on with a “I really don’t have time for this” hand motion all the while smiling politely and ending with a ‘but good luck signing others up’ thumbs up. And then I thought about all the times a CFO or a business owner, or controller, or finance director had waived me on (metaphorically speaking, of course), and so I called the person back.
In short; my carriage had $500 (roughly) of materials, the time to complete the application was less than 5 minutes, and I was on my way with less than minimal disruption to my day happy that I only paid $400. For the purposes of this story we should not focus on my subsequent 10-15 treehouse related trips back to Home Depot I would make over the following month that if I had thought about it I could have taken advantage of and even larger discount.
So, if you are a finance director, a CFO, or controller, or business owner or generally anyone who cares about the bottom line at your company, then let’s talk.
If you want the skinny on what it means to move your global payments to GreenShootsFX, and convert from paying your vendors in dollars to paying in their currency, then here it is:
- If you’re using a bank for FX payments – typically 5% reduction of the dollar value.
- If you’re paying in dollars and not your vendor’s currency – typically 4 to 7% reduction of the dollar value.
- 24 – 48 hours to open an account (well, it’s more of a multi-currency digital wallet to be honest!).
- Easy to complete application.
- Same number of keystrokes – instead of logging on to your bank you’d log on to GSFX.
- When you’ve emailed us once, our details will pop up each time, and once we’re saved in your contacts you no longer have to memorize our number.
- When communicating with your vendor and asking for a price in dollars, take the extra 2.5 seconds (I timed it) to ask “can I have a currency quote too?”
On the last bullet, when you pay in dollars you likely have currency risk which you can’t see and therefore can’t manage. If you’re shaking your head and/or furrowing your brow right now then this statement is true.
The invoice is also inflated (hence the 4-7% saving when switching) because the vendor has the outright FX risk, so switching to a currency invoice and bringing the visibility of FX risk into your company means you now can mitigate it 100% using Forward FX rates and now you have a known dollar value for your cash flow forecast.
Take 15 minutes out of your year and let us explain how we can reduce your expenses. You could probably do with a coffee break once in a while, anyway!