Hedging currency risk ­- a free guide for business

Adverse currency trends can have a huge impact on your business earnings and bottom line. Find out how to help your business mitigate FX volatility from FX liabilities and income with the WorldFirst FX Hedging Guide. This guide is designed to help you navigate the complexities of currency hedging and gain a better understanding of risk management strategies, forward contracts, the challenges of managing FX, and margin calls. For more information, download your FREE guide now.

A forward exchange contract with WorldFirst can be entered to facilitate payments for identifiable goods, services or direct investment. You will be able to lock in a rate 24-months in the future. Here are some of the different contracts we offer:

Fixed forward

Allows you to agree on an exchange rate today, for a fixed amount, to be used on an agreed date in the future (which is the maturity date).

Flexible forward

Gives businesses flexibility on when they take delivery or drawdown from a fixed rate of exchange throughout the contract up until the maturity date.

Window forward

Allows buyers to purchase a specific amount of foreign currency within a range of settlement dates, known as windows. The windows are utilised to achieve a better exchange rate than that of outright forward contracts.

The benefits of forward contracts include

  • To hedge (lock in a rate) a rate to cover an invoice that is dated in the future
  • To hedge a rate to cover a percentage of a company’s forecasted currency requirements for future supplier payments
  • To hedge a rate for project work that is paid in stages for up to 24-months
  • To protect forecasted exporting revenue from currency volatility
  • When profit margins are tight and the ability to adjust the product and pricing is not an option
  • When a business publishes their prices on a website/brochure, and cannot reprice their product if the currency moves negatively against the business eating into their profit margin

Free local currency accounts with World Account

WorldFirst provides Accountants and their clients, who are trading internationally with additional solutions to help them manage their exposure to foreign currencies.

WorldFirst can provide instant access to new markets as well as a payments infrastructure through the World Account. With a World Account, you can access a global account solution across 10 markets, without the need for local banking relationships. For example, if you want to set up a USD account in the US this can be a very arduous process without a physical presence, but WorldFirst can provide a USD account the very same day. All from the comfort of your home office. This is critical, as waiting for payments to be settled following a customer transaction is one of the biggest challenges faced by SMEs. World Account allows for more timely and efficient payments to be made, enabling you to speed up your supply chain with same day availability on 97% of currency pairs actively traded through the platform, giving you more value with faster same-currency and cross-currency payments (cut-off times apply).

The World Account, while popular with ecommerce businesses selling on global marketplaces such as Amazon, is also hugely popular for subsidiaries of overseas businesses who have trouble opening local bank accounts with traditional banking providers. So, if you’re an SME looking to expand internationally, have clients in a similar situation, or are simply seeking more information on how your accountancy or bookkeeping practice can benefit from partnering with WorldFirst or how we can help your business, contact the Accounting partnerships team on +44 (0)207 095 0741 or email Simon Smallwood on simon.smallwood@worldfirst.com.

Alternatively, you can apply online here.

For more information, WorldFirst’s team of dedicated account managers will be able to talk through the options outlined above so that you can properly understand the opportunities and risks they present for your business.

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