5 ways CFOs can streamline their global financial operations


Posted on 30th June 2021

An improved business FX strategy can be the best gift a CFO can give themselves. Ending a reliance on a traditional banking partner for cross border payments and FX processes is easier than you think.

5 ways CFOs can streamline their global financial operations

Chief Financial Officers (CFOs) working in businesses that operate across borders can find their corporate treasury and accounts functions becoming bloated and inefficient as their company expands and grows.

From supplier and staff payments to managing banking relationships across multiple jurisdictions, they have plenty to deal with. However, CFOs can find ways of reducing these costs by accessing new and innovative services that are designed for a globalised economy and that do not rely on traditional providers.

One of the most important areas they should review and reconsider is opening a business bank account abroad. To streamline their business FX, they should open a multi-currency business account that avoids many hidden fees and allows them to access favourable exchange rates on the wholesale FX markets.

Reassess all cross border operations for inefficiencies

A CFO could find their workload and responsibilities double with every new country their company expands into. If you assume that all areas of corporate treasury, accounts and tax compliance need to be replicated in each jurisdiction, this will certainly increase your workload and could quickly cause you to be overwhelmed.

However, this approach is too weighted towards administrative activities and not centred on providing strategic leadership. A CFO with global financial operations should really be focusing their efforts on developing pricing strategies, identifying profitable markets and seeking out the best suppliers, if they are to be truly effective.

To achieve this, they need to be saving time in areas where new services can make them more efficient and profitable. By doing away with unnecessary operational activities, such as managing multiple bank relationships across borders, they can spend more time on more strategic gains.

Reduce costs associated with your business FX

One of the areas that CFOs should look at straight away is their business FX strategy. Far too many businesses with cross border operations still rely on their main banking relationship to power their business FX processes, even though it might be costing them a lot of money.

The transaction and currency exchange fees that banks add on to their clients’ payments may look small when viewed in isolation but they quickly mount up for import and export businesses or those with supplier and staff payments in another currency. Even if these businesses use payment gateways, which reduce fees or roll them up into a single payment, they are usually still hit by unfavourable exchange rates.

For businesses with multiple banking relationships across different countries, the exchange rates between bank accounts can be particularly poor. However, there are alternatives available now that allow businesses to access the best currency exchange rates.

Access the mid-market rate on wholesale FX markets

The key issues that CFOs need to consider when reviewing or planning their business FX strategy is whether their existing banking relationships are allowing them to access the best rates. To do that, CFOs need to understand how their bank comes to offer them the exchange rate it does.

The exchange rate your bank offers you starts off as the mid-market rate, which your bank can access on the wholesale FX markets. It is called the mid-market rate or the middle rate because it is the midpoint between buy and sell prices for any two currencies.

However, this is not the rate you are likely to be offered. One of the main ways your bank or payment gateway includes hidden FX charges is by offering you an unfavourable exchange rate that includes a spread. This spread is the amount between the mid-market rate they can access on wholesale FX markets and the exchange rate they offer to you.

So, to see the spread you are paying, simply search on the internet for the mid-market rate and compare it to what you have been offered for a cross border transaction. Most importantly of all, do not assume that you have no option but to accept the rate being offered. You too can access favourable rates that are inline with the mid-market rate.

Review whether you open a business bank account abroad

You might assume that opening a business bank account abroad is necessary for every new country your business expands into.

This is especially true if your cross border operations stretch beyond simply paying a single supplier. You may want to make it easy for foreign customers to pay you in their local currency. You might also want to pay full time employees and contract workers operating in another country. Usually, there are also new tax compliance regulations to deal with.

However, your response to dealing with all of these new processes should not be to set up multiple new bank accounts with different banks across a range of different countries. Managing multiple bank relationships is time consuming and will overburden your corporate treasury and accounts departments with lots of administrative work that isn’t necessary.

Instead, you should consider the merits of managing all of your global financial operations by opening transactional currency accounts through a single platform.

Open a multi currency account to save time and money

In order to avoid the hassle of managing multiple banking relationships across different countries and be able to access the most competitive exchange rates for your business, you should consider opening a multi-currency business account.

Most CFOs want to ensure their global finance operations allow them to facilitate expansion and growth without overburdening themselves with unnecessary administration. If they choose to open a multi-currency business account, they can do exactly that and operate transactional currency accounts through a single platform.

This means that you only ever have to use one account to easily access the best exchange rates across a range of currencies. Furthermore, by working with a provider like OpenPayd to access business accounts in 7+ currencies and operate streamlined corporate treasury and accounts functions that save you time and money.

For CFOs with global finance operations, this means less time spent on unnecessary administrative processes and more time spent on the strategic financial planning that will facilitate your business’s growth and expansion into new markets.


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