Making a Euro payment? Beware of the obvious pitfalls

When it comes to business, the world is becoming a smaller place everyday. Outsourcing production to China, or customer services to India is the norm today, simply because it is quick, efficient and importantly, cost-effective. So, for British businesses to make use of the European marketplace instead of sticking to its own home stomping ground, makes perfect sense. However, as more British businesses opt for foreign shores, so too must their invoice payments, and all too often companies are happy to do business overseas but are not willing to put the correct systems in place to ensure that they are being as effective and efficient as possible in making international payments. From costs to security, and flexibility to attention to detail, the road to making payments to Europe is littered with possible savings and potential pitfalls, and foreign exchange specialists, as opposed to high street banks, are far better placed to make sure these are picked up on.

Invaluable personal service from brokers

Keeping Euro payments as swift and problem-free as possible will help a business to get the most from foreign markets, and often the help of a foreign exchange broker will ensure the process runs smoothly. Andrew Holloway is a foreign exchange specialist who has experience in making Euro payments for clients. For him, the personal service that foreign exchange companies can offer, makes them a far better bet than high street banks.
Holloway explains: “If there is ever a problem with making a Euro payment, a bank will not be able to offer the same level of support as a dedicated foreign exchange specialist. If a payment can’t be made, for whatever reason, we would talk directly with the client and be able to hold the transfer. A bank will put the reliance on expertise in the hands of the client” So, the following guidelines have been designed for businesses that want to take advantage of foreign markets, but are also keen to make sure that they are doing so in the most effective way possible.

Potential pitfalls when making an overseas payment
 
  • Errors in invoicing – one error, even if it is minute, can cause untold problems for a business that is making use of a European market. One error on a payment will slow down an invoice payment, and this will impact on the business. In the worse situation, the error will even mean the money goes to the wrong account. The good news is that, unlike a bank, a foreign exchange specialist will pick up on any mistakes, and being dedicated and used to such payments, will be able to flag it up early for a client. In most cases, a company paying an invoice through a foreign exchange business, will be able to deal with a problem straight away.
     
  • Include the right details – Payments can be slowed down by businesses not providing the correct onward payment details. All Euro payments must now include the minimum of an IBAN number, SWIFT or BIC code, bank name and full account name. A dedicated broker will be able to offer advice on this.
     
  • Paying too much for transfer – using a foreign exchange company will keep transfer fees low, and give a business access to invaluable advice from a dedicated expert. Banks simply cannot rival the level of support and advice that is available from foreign exchange broker.
     
  • Issue of security – Keeping money secure during a transfer is essential, and businesses must be absolutely sure that a broker is FSA-registered and is following the FSA approved steps.
     
  • Flexibility – Businesses should be aware that often if there is an issue when a payment is due to be made, a bank is likely to take funds from the account regardless. A dedicated broker, however, will engage with the client, and often hold off payment until the issue is resolved.
     
  • Non – receipt of funds – Occasionally if an overseas bank is slow in crediting a payment to an account, the remitter or sender, will need to provide the supplier with evidence the payment has been made. All good foreign exchange brokers will not charge to provide this documentation, but a bank is likely to include a fee. Moreover, the bank will be much slower in providing a detailed payment confirmation.

Clearly, as more businesses exploit markets beyond British soil, there will be a need to keep costs down and efficiency levels up. Making payments in Euros can be kept efficient if businesses take advice from specialist brokers and take advantage of the benefits that foreign exchange companies can offer.

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