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How to Set Up Your Foreign Exchange Services

Last updated June 25, 2013

Your business is going well and now the import / export market is calling. There is a lot to consider – not least the arrangements for your currency exchange and payments. A great deal of money can be won or lost depending on the exchange rate and how you move your money from one currency to another. Here are 8 top tips from World First to keep you on the right track.

Top tips

1. Sort out the pricing and then set the budget. Look ahead at the known costs and ensure that these costs are covered. Fix these costs in sterling using forward contracts or currency options at the time of setting the budget.

2. Consider using Forward contracts or Currency Options to build in flexibility. If you don’t like the idea of buying all your currency on the day, at what’s called the ‘spot rate’, secure some rates in advance with forward contracts or currency options.

3. Be realistic with rates. Formulate a worst case scenario to budget against. It is normal to set your budget 2-5% below where the exchange rate is currently trading to allow some room for movements that are not in your favour.

4. Do research views from a few different sources to make an informed decision about expected foreign exchange rates. There is no cost to sign up for regular updates from foreign exchange specialists. See the World First website for our perspective.

5. Don’t hang your budget off comments in the press. Remember that a wild statement about which way a rate is going gets media coverage. Small rate movements don’t make stories.

6. Assess your exposure to risk with the help of an expert. Different foreign exchange transactions carry different levels of risk and you need to be clear on what implications rate moves will have. Discuss the situation with an FSA authorised broker to help you assess the situation.  

7. Mix and match. Don’t be afraid to use a variety of products in place for various payments. Different products may suit different things, and diversification can help spread risk. A good foreign exchange provider will make sure any hedging strategies fit in with your day-to-day cash flow requirements.

8. Assess your foreign exchange provider. As you would for any other business before entering into an agreement, carry out the due diligence on your foreign exchange provider. Are they FCA authorised? What is their balance sheet like? Get references from clients that deal with them.

World First is an independent foreign exchange and international payments specialist. Currency exchange is their sole business and they work closely with SMEs to manage their risk when it comes to dealing with the currency markets. Below are their top tips to protecting your bottom line if you are importing or exporting overseas.  More information is available at
Twitter,  Facebook,  LinkedIn and the World First blog

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Shirley Mansfield
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