Cross-border operations offer you an unlimited platform to expand your business. However, they’re followed by the heavy burdens of making payments across continents. You’ll also face many challenges when paying for products shipped from abroad. For example, exchange rates, international regulations, exaggerated payment processes, and currency fluctuations are some of the things that will affect your operations.
Timely and effective payments play a crucial part in the success and survival of your business. Having access to international trade and remissions is critical for the growth of your business. It’s necessary to have seamless international payments in the middle of unstable global markets. Previously, challenges in international payments slowed down the flow of economic growth and commerce.
Therefore, as you take a step toward the development and growth of your business, consider seeking tools that will simplify the movement of international operations and transcend bureaucracy complications related to payments. The fees involved in cross-border payments are unbelievable. Incoming and outgoing wire fees, currency conversion fees, and others will weigh you down before your business is off the ground.
Luckily, there are several tactics you could use to streamline international payments. These include:
1. Transfer Money Online
Money transfer shouldn’t be painful. Rather, it should be simple and quick. With an international wire transfer, you make payments online, reducing unnecessary processes. There are quite a few wire transfer options apart from banks. For example, you could also use PayPal, MoneyGram, and Western Union, among others.
Some banks may ask you to visit the branch so you can set up a cross-border transfer. However, others may offer you a chance to set up online. Having a business account online makes it easy to monitor the wire transfer, ensuring flawless payments.
Here are five tips on how to successfully do an online wire transfer:
Go to the wire transfer section on the website of your bank
Confirm your transfer limit; in case you need to transfer a large amount of money, notify your bank
Provide all the details of the receipts, including the name and address, receipt’s bank details, and others
Select the currency to use
Account for the transfer processing fee
2. Implement Financial Technology
You can’t rely on the old traditional payment processes when you want to carry out a flawless cross-border transaction. Instead, invest in intelligent technologies to streamline and simplify payment procedures for foreign vendors or clients. These technologies will enable you to track payments in real time. They will also optimize routing, carry out transactions in local or preferred currencies, and reduce risk.
3. Manage Your Working Capital
You can manage your working capital by offering to make early payments to your supplier. It might take longer for your invoice to be processed compared to the larger vendors. For instance, in the UK, invoices for larger supply companies are processed within three days while those of small to mid-sized businesses (SMBs) may take up to thirty-five days.
Therefore, if you’re just starting up cross-border trading, ensure you can manage your working capital efficiently to make room for early payments.
4. Send Payments in Local Currencies
Small and mid-sized businesses with suppliers throughout the world are faced with the challenge of how to make efficient and cost-effective payments. Sending money in local currencies is another way of carrying out a seamless transaction. It influences the average cost and time of cross-border payments.
This not only streamlines cross-border payments but also saves you a ton of money over using foreign currencies. For instance, if you need to make a payment to a supplier or client in Germany, pay your dues in Euros instead of dollars.
Make it easy for your client or vendor to match payments
Avoid fluctuations and have fixed exchange rates
5. Use ACH or Direct Debit for Payments
The use of Automated Clearing House (ACH) or direct debit to make payments has simplified the transaction process by lowering costs. The ACH processing costs incurred during deposits are capped, unlike other payment methods whose percentage costs vary. You can therefore trust that ACH may simplify your payment process better than others.
There are different types of ACH payment transactions: direct payments and direct deposits. The recipient initiates the direct payment process by requesting funds. A direct deposit process is started by the payer requesting to send money directly to the receiving account.
6. Find a Platform That Will Maximize Payment Volumes
Paying a processing fee may be a common worry for you as an entrepreneur when accepting ACH and credit cards. However, it’s also important to recognize the benefits that come along with this in the long run. You may have to spend some time chasing a check, but you’ll end up saving a lot in the end.
Accepting solutions for modern payment will help you maximize your payment volumes, and as a result, streamline client billing across nations. You’ll be able to automate your processes with this platform, and that means on-time payments.
7. Enhance Relationships with Suppliers
Holding up and diversifying your supply chain relationship goes a long way in simplifying and reducing international transactions and associated costs. You should maintain relationships with a few reliable suppliers that are easy to work with and whose products are cost-effective. Strong relationships with your vendors prevail even in hard times, ensuring that the payment process is easy, smooth, and optimized.
To create the best relationships with your suppliers, you should:
Pay them on time
Maintain regular and consistent communication
Consider cultural differences throughout your entanglement
Ensure everyone is onboard
Consider your vendors as your partners
8. Monitor Your Payment Reports
Keeping an eye on your payment reports and notifications will help you gain more insights on how to streamline your performance and save money. This will help you monitor expired credit cards to help you prevent default payments.
Use Innovative Technologies to Streamline International Payments
Inasmuch as international business offers you an opportunity to grow, it has shortcomings, one of which is making payments across borders. Therefore, you’ll have to find the best payment method with fewer procedures and hidden fees. The exchange rates and currency fluctuations in different countries will most likely affect your business operations. But with the help of intelligent technology, you can manage your working capital. Follow the guidelines discussed above to help you streamline your international payments.