Published June 25th, 2007
Forward Contracts are a very useful tool for all of those importers/exporters who have to keep their margins tight.
For many companies the "head in the sand technique" is very popular. Order goods today, send over the deposit and then in 6 weeks when the goods are about to come into the docks and payment on the rest is due, that’s when they notice the market has moved and "oops" - it has gone the wrong way. Here is a quick but effective example:
A US company wants to buy goods from the UK. They are quoted at 100,000 GBP,... Read more
Tags: Apfx S, Apfx Services, Doing Business Internationally, exporting, foreign exchange, forward contacts, import
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In days gone by, if you were a large company you may have employed your own Financial Director to watch the markets, or maybe someone from your bank was assigned to your account to specifically deal with your overseas transactions. Small and medium companies were left to fend for themselves. When a payment had to be made to an overseas supplier, the bank was instructed to send the payment and deduct the currency equivalent from their account. This led to high charges and poor rates of exchange; but the market has changed. Independent traders offer not only competitive rates but... Read more
Tags: Accounting, Andrew Parsons, Apfx Services, Finance, Finance and Accounting, foreign exchange
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