International Banking in Business – All Tips and Tricks12 min read

International Banking in Business – All Tips and Tricks12 min read

As more companies look to expand their operations globally, opening an international banking account can have significant impacts on a business’s financial performance and growth potential.

While managing international transactions may seem daunting at first, with the right banking partner, opening an international banking account allows businesses both large and small to realize important benefits.

In this article, we’ll explore six key ways that setting up an international bank account can positively influence a company’s bottom line.

From streamlining payment processes and reducing currency conversion costs to gaining insights from consolidated financial reporting, choosing the right digital banking platform is an important strategic decision for any enterprise operating in today’s global marketplace.

Is It Beneficial to Open an International Bank Account in Business?

The short answer is yes – there are numerous advantages to opening an international bank account for business. One of the main benefits is that it facilitates international payments and foreign exchange transactions more efficiently. With a local bank account in markets where you do business, accepting and making payments in foreign currencies is seamless.

No longer do you need to rely on wire transfers that often involve high fees and lengthy processing times. You can accept online payments from international customers directly into your foreign bank account without the hassle and expense of international funds transfers. This improves cash flow and allows you to better manage forex risk.

International accounts also offer enhanced financial oversight and visibility into global operations. Instead of receiving statements from various local and foreign banks each month, you gain a consolidated view of cash positions, expenditure, and revenue internationally through a single online banking platform. This centralized reporting improves budgeting, planning, and financial control when your company spans multiple countries.

Why Businesses Need to Open an International Bank Account

There are five key reasons why it makes strong business sense for companies of any size to open an international bank account:

• Facilitate cross-border payments: As mentioned, an international account streamlines the process of sending and receiving funds from overseas clients, vendors and partners. Wire transfers are replaced by instant inter-account transfers.
• Reduce currency conversion costs: Many traditional banks charge inflated exchange rates on international wires, sometimes as much as 5% above the market mid-rate. Digital banks offer highly competitive forex dealing with thin margins.
• Improve financial oversight: Consolidated reporting provides a real-time snapshot of cash positions globally. No more relying on outdated and disjointed statements from multiple local banks.
• Enhance credit options: Some international banks can provide valuable business loans, lines of credit, and payment financing tailored for cross-border commerce.
• Future-proof operations: Having accounts in place simplifies expansion to new regions down the line. It also strengthens your brand reputation as a global operator.

Simply put, an international banking account brings notable efficiencies and cost savings that can translate directly to healthier bottom line performance over time. Given the clear benefits, it’s easy to see why more and more companies are choosing to open corporate accounts for global or international business.

How to Transfer Money from Business to Business Internationally?

With inflation rising and supply chain turmoil ongoing, many businesses are finding international money transfers more crucial than ever for paying foreign suppliers, collecting overseas receivables, and hedging currency risk.

Fortunately, digital banking platforms like The Kingdom Bank have streamlined the process:

• Register for an online corporate account. Complete a simple application and verification process.
• Add corresponding bank accounts. Link the accounts you’ll be transferring funds to and from, such as an EUR account and USD account.
• Select transfer currency and amount. Input details of the transfer like currency, payment reference and expected value date.
• Authorize and complete. Review details, authorize with one-time passwords, and your transfer is on its way – usually arriving same day when using SWIFT.

For recurring transfers like supplier payments, you can set up automated standing orders. And since forex is a major cost, take advantage of competitive exchange rates on all international transfers for substantial savings over time. The ease, security and affordability of digital banking platforms make cross-border B2B commerce much less of a headache.

How Can an International Bank Account Improve Cash Flow?

One way an international bank account meaningfully affects a company’s financial performance is by enhancing cash flow management. Poor cash flow is one of the leading causes of business failure, yet many enterprises struggle with visibility and control when funds are scattered across various local bank accounts worldwide.

A consolidated global account allows businesses to:

• Accurately forecast cash positions by currency based on real-time account balances, outstanding receivables, and payables. This enables better working capital decisions.
• Facilitate timely collections from overseas customers by providing payment details in local currencies. Funds are deposited directly without delays from international wires.
• Streamline supplier disbursements in multiple currencies through file-based mass payments or automated standing orders according to pre-set protocols. Late payments are avoided.
• Leverage payment financing products from banks to temporarily fund growth through periods of delayed client receipts. This bridges cash gaps.

With all financial data in one place, international planning and liquidity management becomes simpler. Tighter oversight of foreign currency holdings mitigates risks from exchange rate fluctuations too. The end result for businesses is healthier cash flows and the flexibility to support expansion worldwide.

Does Having an International Account Improve Financial Transparency?

While international operations offer scale and opportunities for growth, they traditionally come with less financial visibility due to disparate local banking systems. An overlooked benefit of opening an international bank account is the improved transparency and control it provides over global operations.

With a consolidated account, business leaders gain instant access to a single dashboard displaying key performance metrics like:

• Current cash balances by currency and region
• Monthly income statements with revenue and expenditure broken out by country
• Consolidated balance sheets highlighting assets, liabilities, and equities internationally
• Real-time notifications of any large outbound or inbound payments
• Detailed transaction histories searchable by tag, amount, or date

Armed with these powerful insights, management can optimize decision making, quickly discern profit centers from underperformers, and ensure funds are being appropriately allocated according to company strategy. International subsidiaries also experience heightened accountability through increased financial oversight.

This degree of transparency was impossible previously without integrating data from various banking silos worldwide. With a specialized provider like The Kingdom Bank handling international banking needs digitally, companies gain unified financial reporting to propel global business performance to new heights.

In today’s digital economy, maintaining a competitive edge necessitates an international outlook. By choosing the right banking partner to facilitate cross-border activity, businesses of all sizes can develop their global presence while maximizing operational efficiencies, saving on transfer costs, and obtaining enhanced financial visibility and control over remote operations.

The Kingdom Bank streamlines international banking with its proprietary online platform, removing complexities to transactions while providing powerful financial analytics and management tools.

Consider opening a The Kingdom Bank corporate account to realize the diverse advantages of modern digital banking and fuel your company’s international growth strategy. Visit The Kingdom Bank’s website to learn more.