FX Treasury Management

The better you can forecast the liquidity requirements of your business and the currencies you anticipate to buy and sell, the less likely you are to hit stumbling blocks later down the road which could stall your growth, or worse, cause financial damage to your business. Business Foreign Exchange – treasury management and hedging strategies – are critical for businesses looking to manage foreign exchange risk and minimise the potential negative impact on their bottom line.

Foreign Business Exchange Companies with FX Treasury Management

UK Moneycorp: Highest Level of Credibility, Best Business FX Overall
Headquarters:
Zig Zag Building, 70 Victoria St, Westminster, London SW1E 6SQ
93.4% Editorial rating
7,000 Client Reviews
Minimum transfer:
£250 or equivalent
Why Them?
  • Operating Since 1970 - First Commercial FX Firm
  • Corporate FX Specialists
  • Great Online Platform, Tailored for SMEs
+Read more
UK TorFX: Friendliest Business Currency Broker in the Industry
Headquarters:
St Mary's Terrace, Penzance, Cornwall, TR18 4DZ
93.2% Editorial rating
3,500 Client Reviews
Minimum transfer:
£1,000
Why Them?
  • Personal, Friendly Service
  • High TrustPilot Rating
  • Regular Market Updates
+Read more
UK Global Reach Group: Excellent Client Feedback, Friendly & Professional
Headquarters:
Woolgate Exchange, 25 Basinghall St, London EC2V 5HA
90.6% Editorial rating
1,000 Client Reviews
Minimum transfer:
£1,000 or equivalent
Why Them?
  • 99% Positive Customer Feedback
  • Known for Great Currency Guidanc
  • Highly Usable and Friendly Website
+Read more

These treasury management companies have a particular focus on international payments and mitigating FX risk. They have a long track record of designing treasury management hedging strategies that are individually tailored to each business they work with. After all, every business will have a unique situation. The currencies they currently hold, the volatility between the currency pairs they are looking to trade and a company’s risk appetite will all influence the treasury management hedging strategy designed for them. 

In the case of Global Reach Partners, their treasury management platform (GRG intelligence) enables clients to manage their FX hedging in one place. It provides a comprehensive overview of your current positions, as well as an aggregated Mark to Market view across multiple counterparties, allowing you to stress and scenario test the potential impact of future periods of volatility.

FX Treasury Management Companies for Streamlining Your Accounts

Adopting the correct account structure that matches your currency flows is important. You don’t want to open new currency accounts unnecessarily (particularly with a bank as this will incur unnecessary fees) but if you have requirements to both make and receive local payments in an international currency you don’t want to be constantly converting funds back and forth with your domestic currency either. You could be losing 3-4% of your transfer each time if doing this with a bank. 

These FX companies offer multi-currency accounts that provide you with information on balances held in each individual currency and an estimation of total liquidity across all currency accounts.

Treasury Management for Small Business

When we think of treasury management we can often think to FTSE100 or multinational corporations that have global liquidity operations. Yet, with smaller corporates becoming increasingly open to export opportunities, companies can soon find they are generating just as much revenue, if not more, in their export markets as they are in their domestic market. There’s nothing wrong with this of course, but with this in mind, having the correct treasury management services in place has become more important than ever for smaller corporates as well. Treasury management for small business is definitely a thing these days – on an absolute level, the sums involved for smaller corporates might be less than a multinational but relatively, the international exposure they face can make up just as large a percentage of total revenue.

Smaller businesses often carry out their risk management function on a much more localised scale. FX contracts could be stored on a local hard drive and excel spreadsheets might be used to model FX exposure. The FX companies we list on these pages have increasingly powerful online platforms that can easily allow businesses to set-up rate alerts, pull reports and schedule international transfers for up to two years in advance. Trades booked over the phone will feed into your transaction history too. With many of these companies now opening up their APIs they are becoming increasingly easier to integrate into a company’s existing accounting and treasury management systems as well.

Treasury Management Hedging Strategies

FX risk management is one of the key functions of a treasury and implementing the correct treasury management hedging strategies is vital to successfully managing FX risk. 2020 marked a turbulent year for the financial markets and volatility in commodities and FX markets was high. We saw big swings in oil costs which had an intrinsic link to currencies usually associated with oil exports (such as NOK and CAD). And we of course saw a direct correlation between the severity of lockdown required in a country and the damage this would do to the respective currency. As an example, in under a month we saw GBPEUR move from 1.20 to 1.08.

It can be almost impossible to predict future currency movements, particularly when economic and currency performance is so closely tied to COVID, i.e. how far an economy has to close for effective social distancing measures to be put in place. A specialist FX broker will not tell you where exactly a currency pair is moving but they’ll be able to run you through different hedging strategies and FX solutions that can provide protection if the rate moves against you and potentially help you to benefit from upside if the rate moves in your favour. To learn more about hedging products, see our foreign currency hedging guide.

Treasury Management Solutions

Large organisations adopt some of the most advanced treasury management solutions that are available on the market today (take Kyriba as example) but for smaller corporates the story is often quite different. Firstly, they may not even have a dedicated treasury function, and if they do, they aren’t likely to have the capital to invest in expensive SaaS treasury management products. They may have accounting software in place but this can lack the necessary tools to get a full picture of their FX exposure and how currency movements could impact their business.

For this reason, smaller corporates may not be able to employ the products of pure treasury management companies such as Kyriba but may work with a number of providers that can assist them in performing many of the roles a treasury function does. The FX companies listed on this page will not only tailor a treasury management hedging strategy for you, they can assist you in opening new currency accounts and improving the visibility of your global liquidity position as well. 

Treasury Management & Operational Risk in FX

2020 was a year everything changed – processes that may have once worked in a localised office were often found left wanting when remote working became more prominent. Before the coronavirus pandemic shook the global economy, there were few businesses who had taken the time to review their operational risk management processes and be prepared for this level of remote working.

When the UK and indeed the wider world went into lockdown, treasury functions were forced to make FX payments, deal with foreign currency receipts, and manage a company’s working capital in multiple currencies, all via remote channels. This highlighted the amount of manual work involved in FX transactions – whether this be the monthly payroll run to international employees (which almost always ends up with a few manual workarounds!), internal cross-currency transfers, or large international payments to suppliers. 

The inherent risks involved in manual FX processes were highlighted – moving forward firms will see the benefit in cloud-based solutions that can automate as much of the FX payment flow as possible.

Currency Treasury Management Companies for Small Business – Final Word

Smaller corporates may not be able to invest in the products offered by specialist treasury management companies but that’s not to say they can’t use other services to help them perform the role of a treasury, such as reducing currency risk. In reality, it’s simply not possible for companies to hedge 100 percent of their FX exposure and even if this was the case, it’s unlikely a firm would want to completely remove the potential for some upside gain in currency movements anyway. On top of executing a hedge, small companies can look at ways to internally remove exposures organically. This could be as simple as opening a new currency account, running balances in multiple currencies and creating a natural hedge. This is all advice a knowledgeable currency broker will be able to provide your business. Treasury management hedging strategies are just some of the tools your business can adopt – there are other opportunities to reduce FX risk across the organisation without needing to take out derivatives and incur trading fees.