Paying suppliers in USD: Here's how to leverage the most widely accepted currency in the world to improve relations with your supplier and negotiate better payment terms.
The USD is top of the food chain in foreign exchange and international payments. It's normal to pay your U.S. suppliers in this currency, but even non-U.S. suppliers may prefer USD payments for reasons such as:
If your international supplier has requested payment in USD, here's the best way to go about it.
Getting the best exchange rate is essential if you want to make the most of your business funds. You could pay your international suppliers through your business bank account, but the exchange rates are far from competitive, and transfer fees are high. You're better off choosing a specialist provider that works in bulk and can pass cost savings to you.
For example, a currency specialist like MTFX deals with large volumes of currency exchanges and offers exchange rates that beat the banks by 3-5%. That’s $1,500 on each $30,000 payment. You'll save more on larger supplier invoices in U.S. dollars or when making regular payments overseas. Low transfer fees mean you can lower the cost of your invoice payment processes even further.
Technology can be a critical tool for expediting your supply chain. By skipping the bank and using an online money transfer provider, you can settle invoices 24/7 without the inconvenience of waiting for official banking hours. For time-sensitive payments, having round-the-clock access to an online platform with best-in-class technology can be a significant advantage over banks.
It's particularly essential to find an online money transfer provider with a business-centric approach. MTFX can help streamline your international payments processes with custom solutions like multi-currency accounts and batch payments. Once you register your MTFX business account, you can count on automation technologies that eliminate error-prone manual data entry.
Making on-time payments is the best practice to strengthen your relationship with your international suppliers. Remember, your suppliers have deadlines of their own, so speed and efficiency are critical if you want to take advantage of discount opportunities or more favorable payment terms. Thankfully, you can expect your USD supplier payments to take 24-48 hours when using a specialist payment provider like MTFX.
MTFX also offers same-day transfers and has a global network of banking partners to ensure your funds arrive anywhere in the world quickly and efficiently. There are more benefits when your suppliers don't have to wait too long for their U.S. dollars, including a better business reputation and no late payment interest charges.
When looking for the best way to make USD supplier payments, consider options that offer human help whenever you need it. Some transactions may require guidance or assistance from a dedicated account manager, especially if you want to develop an effective strategy to mitigate currency risk and protect your business's bottom line.
As a full-service foreign exchange platform, MTFX gives you a more personalized experience with foreign exchange specialists that can answer your questions and ensure the platform suits your business needs.
Currency markets are fluid and unpredictable since they're influenced by many factors, such as interest rates, political situations, and economic data releases. These fluctuations will determine the cost of your USD invoice. For example, Reuters ² reports that the Canadian dollar will strengthen against the USD over the coming year.
That means Canadian businesses can benefit from cheaper goods if the home currency maintains a solid performance against its U.S. counterpart. In contrast, if the home currency weakens, your USD invoice becomes more expensive for the same amount of goods.
The good news is that you're not entirely at the mercy of market volatility. You can use risk management tools, like a forward contract which allow you to lock in a desired exchange rate to protect your profit margins and ensure smooth cash flow.
Another risk management tool that gives you more control is a market order, which allows you to target the rate you want while controlling downside risk.
The world is now a global village where you can secure the best goods and services at the right price for your business. With technology ruling, there's no reason why your supplier can't receive payments in U.S. dollars if that's what they want.
Paying your suppliers in USD is simple with an MTFX business account. You can create your account within five minutes to start save money on your international invoice payments.
Sign up for a free account today to enjoy quick and easy transfers with competitive exchange rates and low transfer fees.
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