October 15, 2021
Challenges and risks of importing and how to manage them
As specialist providers of foreign exchange rates and services for South African SMEs, we understand the challenges and risks facing our clients when importing and exporting goods to and from South Africa. We’ve put together a list of the four most frequently encountered for you below:
1. Cash Flow
Cash flow constraints as a result of delays between paying suppliers, receiving your goods and collecting payment from customers can pose a big financial risk to your business. This can be exacerbated by the nature of the goods you’re importing and the length of time it takes from payment to delivery. In some cases, your money may be tied up for a significant amount of time, putting a strain on your working capital and hampering growth.
Currency Partners can free up valuable working capital tied up in your supply chain with our competitive Trade Finance solution to mitigate and help you better manage this risk. By leveraging our economies of scale, we can give you access to the best terms and cost of capital in the market to help your business grow faster.
2. Operational risks
When importing, your products are exposed to a number of operational and supply chain risks which are out of your control. These include; production and quality issues, loss of or damage to goods in transit, shipping and clearance delays, administrative errors and other related supply chain risks.
Currency Partners can assist SMEs in managing these risks through strategic partnerships to offer our clients end-to-end supply chain solutions.
3. Volatile exchange rates
The Rand is one of the most volatile currencies in the world and fluctuating exchange rates can pose a significant market risk to importers and exporters alike. Uncertainty in cost of sales can put pressure on margins and erode profits when not hedged.
Currency Partners can help you manage this exchange rate risk with bespoke hedging solutions that secure exchange rates in advance and require smaller margin deposits to give you certainty over costs and pricing so that your profits are protected.
4. Administrative complexities
Exchange control regulations, levies, duties and taxes place significant obligations and administrative burden on importers. Navigating these complexities can be tricky and very onerous on SMEs who don’t always have the necessary knowledge, skills and resources to manage this effectively and efficiently.
Currency Partners can help streamline the administration and alleviate the burden of this process from start to finish. Our team of experienced experts will assist you in managing the related documentation and complete any supplier payments for you, freeing up your time and money to help you better grow your business.
To speak to an expert in our specialist business team, email enquiries@currencypartners.co.za or call us on +27 21 203 0081.
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