February 18, 2010
At the end of last year, TransGlobal Payment Solutions commissioned a survey to discover the extent to which AP is affected by fluctuations in currency exchange. In some areas the results were surprising; for example, the study found that in this era of overseas outsourcing, only 10% of the respondents noted that they made foreign currency payments to pay staff.
Other areas of the study were more predictable in that almost 70% continued to use their regular banking partner for foreign currency transactions – noting a general lack of time as the reason for doing so. With some of the respondents reporting foreign currency transactions to the tune of £1.2bn, using the best resource available to do so, should become a necessity.
The survey also explored the reasons why organisations make foreign payments. Payments in the SEPA area came top of the list, while making payments to foreign subsidiaries made up for 20% of the reasons. For the majority of people the time they spent dealing with this was relatively small. 20% of those questioned said that dealing with making foreign currency transactions took up 20% of their time, with 40% saying that they made foreign currency transactions a few times each week.
Interestingly, nearly a quarter of respondents said that they would be interested in using a pre-paid currency card to help keep control of currency expenses.
Ultimately, TransGlobal’s survey highlighted that although the majority of AP departments are making foreign currency transactions to a letter or greater extent, for many it’s seen as a necessary evil. This was indicated by the number of organisations willing to hand over control of the function to their regular banking partner, without too much regard for the rates which that bank offered. However, with the right solution provider – the control can be handed back to the AP department and organisations are able to take advantage of the better deals available on the market.
Click here to view the whole survey