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International finances: the 4 most common problems we heard SMEs faced in 2022

It’s that time of the year again when we all look back and reflect on the lessons learnt. Although there are probably many things to summarise in a simple blog post, we believe these four headlines shed some light into what 2022 has been for many businesses in the world of foreign trade.


International business payments take lots of effort

"Receiving electronic payments from international customers is a complete minefield in terms of how and the ways to do it. As the transfer fees by traditional banks are too high and not viable for our business, we have to look for alternative providers. This means I have to take time out of running my business researching different payment methods"

FSB Member, Current Exporter & Importer, based in Sheffield

We’ve heard variations of the above in many instances. For many finance professionals, dealing with international business payments is a constant pain. The lack of transparency when it comes to currency charges or not even knowing what options are available, present a problem that from the outside doesn’t seem to have a simple solution.

The cost of international trade 

“My business doesn’t do enough internationally to care about these things” or “I already have a good deal with my bank” are among the most common comments we’ve heard. But the reality is that the lack of tools for small businesses translates into a poor understanding of the costs involved in foreign currencies.

The limitations of popular accounting systems like Xero usually get in the way of providing the right insight into exposure. Using Xero as an example; the system converts everything into base currency and you can only see the balance sheet in your currency. Understanding the exposure between sales ledger and purchase ledger is not feasible. This results in fx gains & losses being usually missed or misinterpreted. And what happens next? Many businesses end up adding this into overheads making it impossible to understand the real cost of foreign trade.

Currency moves

“Why should I care about hedging or pre-booking currencies in advance anyway?”

If 2022 has taught us something, that is that hope is not a good strategy when it comes to dealing with currency moves. We’ve seen how many businesses felt the squeeze with the fall of Pound Sterling back in October. This has more clearly than ever reinforced the importance of having a strategy in place to tackle currency fluctuations.

Read more about the importance of having a strategy in place here.

International payments fraud

In a survey conducted for the Take Five to Stop Fraud campaign at the beginning of the year, 80% of SMEs said they had received an unsolicited text or email request for money and personal information, and 64% had received unsolicited phone calls.

It’s clear that the risk is there, and it’s even harder when we are talking about international finances. While UK banks have good ways of helping customers spot the early signs of fraud for local finances; when it comes to sending money abroad things are slightly behind. 

We’ve covered the challenges of international payments fraud in a previous article. Read more about what your business can do against fraud here

How technology can help

Integration + automation + service. That’s the equation we believe is needed to solve all of the above challenges.

Integration: Lack of time to work across many systems is a current problem for many. With platforms that offer efficient and affordable ways of integrating your finance and accounting solutions in one place, that’s no longer a problem.

“Being able to pull the invoices and just pay them directly with HedgeFlows is great. It’s not a challenge anymore. Feeding [invoices] back to Xero; I didn’t know that was even a challenge and now you guys do it for me!”.

Alice, Co-founder of JBM Freight

Read the full case study.

Automation: Local bulk payments are a common occurrence, but what about foreign bulk payments?; Not so much. Automation in all its ways can have an important impact on how you operate and navigate foreign finances within your business.

“With HegeFlows you can easily see the risk and exposure based on the US Dollars ($) invoices you’ve got outstanding. This means you don’t have to look into it or work it out yourself; the platform automatically gives you this information”.

Charlotte, Operations Manager at Zygo

Read the full case study.

Service: The personal touch and experienced support is key to build trust and help busy teams overcome the challenges that foreign finances may present.

“We were using Western Union for our spot transactions before, but getting support was impossible. HedgeFlows is much more competitive and gives us the stability we need. Whenever we need support, we get it straight away”.

Davy, Co-founder of Cable Analytics.

Read the full case study.