Are you already doing business in other countries or trying to expand beyond your home market to take advantage of opportunities abroad? If so, you have many reasons to open a business account that can handle multiple currencies, including lower operational costs and better cash flow. And when you do business across countries, you’ll face more problems, such as high transaction costs and fluctuating foreign exchange rates. So what are they, and how do you open multicurrency accounts?
What is an international multi-currency account?
An international multi-currency account helps you deal with foreign currencies like dollars and euros, when buying and selling outside your home market. Having a bank account that can handle only one currency can make you may lose money because of high fees and complicated transactions.
5 reasons to open an international multicurrency account
Here are the five most important ways a multicurrency account can help your business.
1. Lowers the cost of doing business
Each bank will charge a maintenance fee when you have different bank accounts for foreign currencies. Also, there may be secret fees because the transaction chain is more complicated and often less clear. When a payment goes through correspondent banks, the banking network that moves money worldwide, you may have to pay extra fees. But a single multi-currency account lets you hold all the currencies your customers and suppliers use in one place, and you only pay one maintenance fee.
2. Manage foreign exchange better
If you only have one account that automatically converts foreign currencies to British pounds, you will lose some money if the exchange rate is unfavorable. On the other hand, a multicurrency account can accept payments in euros without converting them. That’s why you should open the best foreign currency account UK.
A multi-currency account is also a holding account, so you can wait for a favorable exchange rate before converting from one currency to another. If you have enough money, you can also pay your suppliers by buying cash at a good rate and keeping it in your account until you need it.
3. Easy to manage and convenient
When running a business, the difference between success and failure is how well things work. And cashflow and control are vital when it comes to payments, which are the lifeblood of every enterprise. With a multicurrency account, keeping track of everything is much easier because it’s all in one place. Monthly bookkeeping is easier because you don’t have to match and reconcile bills and receipts in different currencies and make fewer changes for differences in exchange rates. You also won’t have to deal with different banks in other countries. Everything is right in one report, so you can see what you’ve gotten and spent.
4. Quicker cash flow
Speed is vital to cash flow; cross-border payments are typically slower than domestic payments. But if you can work with local currencies, transactions will be more effective and quicker because you’ll use local payment networks. And if you have an account that can handle multiple currencies, you can get to payment settlement immediately, no matter where you are.
5. Better customer and supplier relations
When customers like the ease of payment, they are more likely to buy from you again. And if potential buyers can’t pay in the currency they prefer, you may not make any sales. It makes sense to have a way to accept payments online that works with multiple currencies and meets local needs. If you’re dealing in Europe, deal in euros. If people want to pay in dollars, you should take dollars as the preferred way of payment. To be a multinational business, you have to be flexible.
If you buy and sell things abroad or are thinking about it, a multi-currency account will greatly help your business. In addition, setting up multicurrency accounts is easy after passing a few basic security and verification checks. Today, many payment service providers will let you open accounts servicing multiple currencies. That means you don’t have to deal with a bank directly.