Companies make thousands of cross-border transactions to international suppliers daily, but unfortunately, many of these payments encounter preventable mistakes. Issues such as long payment delays, unexpected fees, or even lost funds can have a significant impact on your business, disrupting supplier relationships and putting essential operations at risk. Many of these challenges stem from simple errors, and by avoiding them, you can keep international suppliers satisfied while ensuring your business runs smoothly. In this post, we discuss the most common mistakes companies make when paying international suppliers, and how to avoid them.
Common Interntional Supplier Payment Mistakes Businesses Make
When paying international suppliers, businesses often make certain mistakes that lead to delays, additional costs, or compliance issues. Many of these mistakes are easily avoidable with the right knowledge and preparation. Below, we highlight some of the most common errors and offer practical guidance on how to prevent them.
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Insufficient Knowledge of Tax Regulations
One of the most frequent errors businesses make is failing to fully understand the tax regulations involved in international payments. This oversight can result in unexpected liabilities and compliance issues. When sending funds abroad, it’s essential to ensure you are compliant with the tax laws in both the home country and the supplier’s country.
A reputable foreign exchange provider can simplify this process by helping to manage tax compliance on your behalf. Partnering with a provider like NewbridgeFX can ensure your payments adhere to the necessary international regulations, saving your business from costly penalties and maintaining smooth supplier relations.
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Selecting the Wrong Payment Method
Many companies make the mistake of choosing the most readily available payment option, such as their bank, when transferring funds internationally. While this may seem convenient and easy, it often comes with downsides, including high exchange rates, slower transaction times, and hidden fees. To minimise costs and streamline payments, it’s essential to research your options and choose a reputable foreign exchange specialist.
Companies like NewbridgeFX offer competitive rates, faster processing times, and no fees, specifically tailored for international supplier payments, making them a more suitable choice than traditional banking options.
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Not Locking in Exchange Rates Before Sending Payments
Some businesses neglect to secure an exchange rate before making a payment, which can leave them vulnerable to currency fluctuations. This means that if the exchange rate drops before the funds reach your supplier, they may receive a lower amount than expected, potentially impacting their cash flow and your business relationship.
To avoid this, businesses should consider converting the currency upfront or using a forward contract to lock in an exchange rate, such as those we offer at NewbridgeFX, ensuring the amount sent and received remains consistent despite market changes. By locking in rates, businesses can avoid unexpected costs and maintain stable, predictable payments for their suppliers.
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Overlooking Transfer Fees
Many banks and payment providers apply various fees, including those for sending, receiving, and converting funds, which can add up quickly and impact your bottom line. These hidden charges can lead to budgeting discrepancies and erode profit margins over time.
To avoid unexpected expenses, opt for a currency specialist like NewbridgeFX, which provides transparent pricing and eliminates hidden fees. By choosing a provider with low or no transfer fees, you can ensure your funds reach the supplier without unnecessary deductions, helping to maintain both cost efficiency and strong supplier relationships.
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Not Verifying Estimated Delivery Times
An often-overlooked factor in international payments is the expected delivery time. Different payment providers vary widely in their processing speeds, with some transactions taking days, or even longer, to clear.
Failing to check delivery times can lead to late payments and strained supplier relationships, potentially affecting future orders and trust. By selecting a payment provider known for prompt transactions and by confirming the estimated delivery time before sending funds, you can help ensure timely payments that foster positive supplier relationships and uninterrupted business operations.
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Inputting Incorrect Payment Details
Accurate payment information is essential for smooth and secure transactions, yet inputting incorrect details is a surprisingly common mistake. Simple errors, such as mistyped bank account numbers, incorrect BIC or SWIFT codes, or even the wrong IBAN, can lead to significant delays and may even result in funds being sent to the wrong account, creating costly recovery challenges.
Double-check all details, and consider using an IBAN verification tool to avoid errors. Taking the time to verify information can prevent costly and time-consuming mistakes, ultimately safeguarding both your finances and supplier relationships.
Streamlined Payment Solutions for International Suppliers
Paying international suppliers doesn’t need to be complex or challenging. With NewbridgeFX’s foreign exchange and international payment services, businesses can make global currency payments easily and securely, no matter where your suppliers are based. We provide competitive exchange rates, ensure payments clear within minutes, and support over 45 currencies in more than 200 countries worldwide.
You can manage all your supplier payments through our market-leading online platform or let our expert team handle the details over the phone; allowing you to focus on building international relationships without the worry of payment delays or unpredictable currency fluctuations.
Diverse Payment Solutions for Global Suppliers
We offer a range of payment solutions tailored to your business needs, including forward contracts, spot contracts, and market orders; designed to streamline international supplier transactions while managing and mitigating currency risks. Plus, with zero processing fees, 24/7 transactions accessible from multiple devices, and real-time reporting and tracking, paying international suppliers becomes straightforward and seamless.
Want to simplify international supplier payments? Open a business account with NewbridgeFX by completing our business registration form. Alternatively, reach out to our team via our online form or call us on 0207 871 7800 for further assistance.