Managing FX risk when you don't have a treasury team

You probably have more FX exposure than you think

Most UK SMEs with overseas suppliers or customers have some currency exposure — even if no one in the business uses the word "treasury". A purchase order priced in USD but paid 60 days later is an FX exposure. A sale invoiced in EUR that settles in 30 days is an FX exposure. The point of "managing" it is not to predict rates; it is to make the outcome you live with less dependent on luck.

A four-step approach for businesses without a treasury team

1. Map exposures. List every recurring receivable and payable that is denominated in a non-GBP currency. Note the typical timing between booking and settlement. This is your exposure map.

2. Decide your tolerance. Pick a movement size you would not want to absorb. A common starting point is "if rates move more than 3% against us between order and payment, that hurts margin". That sentence is your risk tolerance.

3. Choose a tool per exposure. Spot conversion is fine for small or short exposures. Forward contracts let you lock in a rate today for settlement on a future date — useful when you have committed to a price in a foreign currency. Structured tools combine these.

4. Review quarterly. Re-map exposures each quarter. The business changes; the tools you use should change with it.

Where TimeFX helps

We help UK businesses sit down with this exposure map and talk through which of our FX tools fit. Foreign exchange rates fluctuate, and no tool removes that fact. The right setup makes the fluctuation easier to plan around.

To talk through your exposure map, make an enquiry.