Cash flow is a big enough challenge for small businesses to master on a level playing field. But when expansion starts happening, and nuances like international sales and global payments are thrown into the mix, managing cash flow can become more of a challenge due to fluctuating foreign exchange costs. Foreign exchange also becomes relevant for businesses that source materials from overseas or that import or export products.
Whether transacting with Europe, Asia or South America, it won't be long before business owners start to notice variations in their margins, sometimes working in their favor and other times against them. This is due to volatility in foreign exchange (forex) rates, which can change on a dime in response to forces such as geopolitics, like the US election, or economic conditions like changes in interest rates.
One common denominator in international commerce is that forex opens the door to uncertainty, which can impact a business's bottom line and affect profits.
