| Friday, September 4th, 2015

Managing overseas corporate travel expenses and corporate FX cards


Businesses that regularly spend money abroad require a cost-effective, reliable solution for managing their overseas and travel expenses, including employee travel, fx international payments to vendors, or employee payroll payments. Foreign exchange service providers specializing in finding the best currency transfer rates at the lowest fees can offer some of the best options for companies transacting business abroad.

Managing employees overseas, ensuring payments are sent on time, and budgeting for travel expenses and payments in multiple currencies, can be challenging. Many foreign exchange service providers today are able to help companies manage their international expenses by providing cost-effective, safe, and fast ways to send money abroad and to manage their exposure to currency risk.

Forex service providers can help businesses with their international funds transfer needs in three distinct ways:

  1. Pre-loaded currency cards, which allow the holder to keep multiple currencies in one place, can significantly reduce the administrative costs associated with international travel expenses. A pre-loaded currency card can be programmed with spending limits, will lock in an exchange rate in advance, and obviates the need to reimburse staff for expenditures. Currency cards can also offer better currency exchange rates than withdrawing cash while traveling, and no transaction fees are incurred while abroad. Currency cards are also safer than carrying cash, and are easy to order and set up for employees.
  2. In addition to pre-paid currency cards, many foreign exchange service providers also offer companies the ability to establish international payments for their overseas transactions at better exchange rates than those typically found at a bank, provide a dedicated account manager, and offer online access to customized reports and analysis.
  3. Service providers also typically provide a number of risk management services to companies, giving them numerous options to reduce their currency risk and exposure to forex market volatility.

Benefits of Managing Overseas and Travel Expenses

By providing customers with pre-paid currency cards, international payments solutions, and risk management solutions, foreign exchange service providers can help companies transacting in the currency markets to manage their risks, lower administrative costs, and save money by finding more favourable exchange rates and reducing the amount they pay in fees for international transactions.

manage corporate travel expenses and fx cardsPre-paid currency cards offer a number of benefits, including the ability to lock in a favourable exchange rate, cap employee spending, provide a safe, hassle-free way for employees to spend money while traveling abroad, and reduce administrative costs by removing the necessity to reimburse clients for overseas travel expenses.

Using a service provider enhances and simplifies a company’s ability to send money internationally for payments to employees, vendors, or for purchasing goods, as well as saving money. Service providers will assign a dedicated account manager, who can often find the best overseas exchange rates, and will help companies set up regularly recurring payments to save time. Providers can generate reports to help companies analyse their global spending, and help to reduce administrative costs in the process. Fees for global payments are usually minimal, and significantly less than what is charged by a bank.

Most service providers will also offer customized risk management solutions for their customers, which can include a range of offerings, from tailored reports to market analysis and online tools, as well as trading solutions, including options contracts, hedging, and futures contracts.

Managing Overseas and Travel Expenses Case Study

Product:Corporate FX Cards

Issue: Give employees a way to safely pay for expenses while traveling abroad for business without making them carry large amounts of cash or exposing them (and the company) to fluctuating exchange rates.

Business Goal: Find a safe, cost-effective solution that allows the company to provide its employees with spending money while also reducing the need for travel expense reports.

  • An international beauty brand needed a safe, cost-effective way to provide cash to its employees whilst overseas on business. The company wanted to secure the best exchange rates, give employees the ability to pay for expenses in a safe, easy manner, and cut back on administrative efforts and costs at the same time.
  • The company found a foreign exchange service provider that offered pre-paid travel cards, favourable exchange rates that could be locked-in in advance on the card, and the ability to store multiple currencies on the same card. Employees were able to use the cards at most locations while traveling, and avoided the hassle of having to find a bank or ATM to withdraw cash while on the road.
  • Today, the company has been able to save approximately 20% on administrative costs related to expense reporting and invoicing, and employees are not only satisfied with the abilities of the pre-paid card for their travel expense needs, but feel safer carrying it instead of large amounts of cash when traveling.

Managing Overseas and Travel Expenses Risks and Issues

While using a pre-paid travel card to lock in favourable exchange rates is one of the easiest and most convenient ways to travel, it is possible that the currency rate may fluctuate and improve once a rate is already locked in. If this occurs, it is possible to “lose” money on the amount that is already stored on the card. Equally, a pre-paid card may allow a “gain” to be made if the rate were to deteriorate.

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