Pitches

Moneycorp's Marc Morley-Freer looks atthe latest systems for international payments.

Collecting money from clients is tricky enough, without the added issue of them living overseas.

Whatever your involvement in the fractional ownership industry, you will no doubt have experienced the challenge of how to manage international collections and payments. Whether you’re collecting funds from clients based overseas or making international payments to your own beneficiaries, the process is rarely straightforward. 

Developers will commonly say: “It’s the customer's responsibility to make sure the money arrives on time, in full and in the correct currency; I shouldn’t have to spend all my time chasing them for payment... I JUST NEED THE MONEY!”

Ultimately, it is the customer’s responsibility to make sure that a payment is made. But, pointing the finger doesn’t really help a business when it comes to managing cash flow and maintaining good relations with customers.

If a client pays on time, in the right currency, using the right reference, developers can concentrate on what they do best – building and selling homes – not chasing monies and working out who has paid.

Late payments inevitably have a knock-on effect on a developer’s outgoing payments and cash flow. Without payment from clients, outgoing transfers for the construction and up-keep of properties are also likely to be delayed.

Basically, we’re not telling you anything you don’t already know: to run a sustainable business, you need an efficient payments process – ensuring you and your suppliers aren’t left to rely on a temperamental banking system to settle and pay invoices.

Breaking down the barriers that make it difficult to pay bills is one of the best ways to ensure a company maintains a decent relationship with its clients. Businesses can really differentiate themselves from the competition by providing a service that reduces unnecessary time spent on payment administration. And then there’s the cost.

Clients are always looking for the best value, even when it comes to making international payments. Poor exchange rates and high transfer fees, combined with the time it can take to make a payment through a high street bank, can leave clients dreading the time when they are requested to make their next ‘nuisance payment’.

A prime example of this would be a property developer, with UK-based clients who need to make quarterly maintenance payments of $2,000. Some clients would make this payment through their existing bank; and they would be charged a 5% foreign exchange margin (approx) and up to £40 in transfer fees. So that $2,000 payment can end up costing around £102. To make matters worse, the process of making the payment is far from easy – which is another reason why clients fail to make their payments on time. 

So how can a company help its customers avoid charges like this and, in turn, streamline the overall payments process? Better alternatives to traditional banks do exist.

Moneycorp has launched a new service that enables corporate entities to request payments online, whilst providing their customers access to commercial rates of exchange and significantly lower transaction fees. 

PayCollect allows the payee to invoice clients online and it allows clients to settle invoices by making an online payment using a credit or debit card. Not only does this service save them time, it saves them money too – especially when compared to making international transfers through a bank.

Most importantly, for companies and their clients alike, it takes away the unwanted hassle of currency conversion. Developers are able to invoice clients in the currency that they want to receive, while clients can settle invoices in their own local currency. Any currency conversion is automatically taken care of by PayCollect.  

The speed of the payment process has already been highlighted as a key benefit for the payee, but there is also the added advantage of special reporting and reconciliation tools. Companies will see time spent chasing and allocating payments drastically reduced, which, of course, will have a positive effect on cash flow and should help free up resources.  

This is all good news. But what happens when a company needs to make outgoing payments to beneficiaries for goods or services? Like their clients, businesses can also fall victim to the international banking system when it comes to making cross-border payments for invoices requested in a foreign currency.

Services are available from specialist companies that will enable a corporate entity to hold accounts in multiple currencies at no cost, benefit from preferential foreign exchange rates and control priority international and domestic payments at the touch of a button. The system can also help improve communications with beneficiaries, informing them when payments have been raised and sent and reducing international transfer costs.

Making and requesting international payments should be a simple, cost-effective process. Moneycorp’s Corporate Payment Solutions which includes PayCollect, were designed with this in mind. If your current FX and payment service provider doesn’t offer you the features mentioned above, or simply to find out more, contact Moneycorp on 0800 910 1828 or visit www.moneycorp.com/paymentsolutions.