A typical foreign exchange Scenario
A Jewellery retailer imports raw materials and finished pieces from numerous suppliers in Europe and the Far East. The requirements of the business vary according to the time of the year and season trends. When sending a wire transfer to the supplier they found the bank offered very poor exchange rates and confusing and expensive transfer fees. Additionally, instructions to the same supplier needed to be completed on a form and faxed every time, with no exchange rate confirmation from the bank until the company account had been debited several days later. Payments could take any time up to a week to arrive in a suppliers account.
VFX allows clients to purchase currency online in addition to traditionally ordering by phone. The jewellery retailer receives a daily brief to keep up-to-date on the current exchange rate movements. When the client receives an invoice from a supplier they simple login to VFX ONLINE or phone through to a dealer to obtain a rate according to when an invoice needs to be paid. The exchange rates offered are far better than what their bank could offer. Once a rate has been agreed an emailed trade confirmation is then received, highlighting the exchange rate and amount in sterling required. Onward payment instructions (OPI) or supplier’s bank details are then inputted and stored online in the account management system for future use. When funds are sent to a supplier’s bank account (as per the value or settlement date) the client receives a payment confirmation by email. The client knows funds will arrive within 24 hours. Any queries arising can be answered spontaneously by phone or email.
The jewellery retailer worked with VFX to help minimize their market risk on purchasing required currencies through their dedicated personal broker. VFX market data services help them to seek a better time to transact within their timeframe and gain a better rate. The time taken to complete a transaction has been reduced significantly by managing payments from pre-recorded supplier bank details online. VFX ONLINE also allows clients to recall a history of transactions and monthly statements so they are always clear on their financial position. In addition to saving time, hassle and money the client is also clear on when the supplier will be paid, helping to maintain a good business relationship. Having the traditional option of ordering by phone at the client’s disposal provides human contact when required from a premier, service driven company.