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UK businesses most wary of currency risk among peers

Survey finds managing currency risk over next 12 months worries third of UK CFOs

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UK businesses are more concerned about how currency volatility will impact trade than their global peers according to a new study published by purchase-to-payment solutions provider Basware.

In its recently concluded annual Global E-Invoicing survey, Basware found a third of UK businesses stated that better managing currency volatility was a key priority for the next 12 months, compared to a global average of 9 percent.

In conjunction with the Institute of Financial Operations (IFO), the global survey, presently in its second year of publication, found that other European regions in particular did not deem management of currency volatility to be a key priority for the year ahead.

For instance, 4 percent of Swedish and Norwegian companies selected it as a focus accompanied by 2 percent of Finnish businesses. The USA and Germany were marginally higher but still did not rate currency fluctuations as a central issue with only 6 per cent naming it a priority.

In order to reach its conclusions, Basware polled 908 senior finance professionals spread around the globe, of which 108 respondents were UK CFOs and finance directors.

Commenting on the findings, Andrew Jesse, vice president of Basware UK, said that as governments struggle to spur on economic growth and markets remain precariously balanced, currency volatility can present significant challenges to UK, especially given its levels of overseas trade and position as a hub of international business.

“The implementation of austerity measures, changing economic ratings and the continuing struggle to conclude bailout discussions all result in a level of currency volatility that can bring about considerable difficulties in payment and contract resolution,” he added.

However, many businesses are looking to technology to increase speed, control and efficiency in the face of this volatility. Basware found that a vast majority (73 percent) of UK CFOs and (93 percent) of Global CFOs saw e-invoicing as a tool that can help them manage and mitigate currency volatility.

“Transparency and rapid processing is of paramount importance when dealing with currency in flux and if constrained by paper an already complex invoicing and payment process becomes mired in an added layer of confusion,” Jesse said.

Elsewhere in survey, UK companies identified optimising cash flow and working capital management as the most important target for the year ahead with 69 percent of those surveyed selecting it as a key priority versus a global average of 49 percent choosing this as an important focus for the next year. The need to improve operational efficiency was a close second for UK finance heads, chosen by 65 percent of respondents.

The research also showed that after years of neglect in the name of cost savings, green priorities have begun to make their way back onto the financial agenda. Just under half of UK businesses (44 percent) stated that improving environmental practices, such as green sourcing or paperless processes, were a priority for 2013.


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