As the UK moves into a new era of overseas trading relationships we reveal the risks and rewards and how you can protect your business when trading internationally. Here's a brief overview of the key issues at hand.
Overseas trade is an opportunity for almost any UK business. With 86 per cent of Department of International Trade (DIT) clients saying that exporting afforded them a level of growth not otherwise possible, it has clear benefits. With exporters also reporting a 34 per cent rise in productivity in the first year alone, the figures speak for themselves.
But every company must venture forth with its eyes wide open because there are risks attached to trading overseas. Understanding what is involved in mitigating overseas trade risk goes a long way to unlocking opportunities for growth. Help is at hand.
Across ten detailed sections, our Trading safely, smartly, successfully online brochure highlights the key risks and challenges inherent in exporting, but crucially provides ways of mitigating each of those risks.
The key to successful exporting
Before attempting to export, strong due diligence, at least equal to that applied to domestic trading partners, is required. Elements such as country risk, sanctions, embargoes and money laundering checks form a vital extra part of safeguarding new trading relations. Our guide confronts these issues before considering overseas bank account management and monitoring, and the selection of appropriate payments and online transfer mechanisms in the face of unfamiliar systems and procedures.
One of the key risks of international trade – currency fluctuations – can be mitigated through the use of hedging instruments and Trading safely, smartly, successfully also shows how it is possible to harness opportunities where exchange volatility exists, building an effective FX strategy that can create competitive advantage.
Of course, to minimise the risk of costly delays and contractual disputes, international trading demands effective management of documentation, such as Letters of Credit and Bills of Lading. But documentary requirements can vary significantly by both country and importer; accurate preparation of trade documentation is accorded its own section within our guide.
Trade documentation goes hand-in-hand with transportation but reputation as a trusted exporter may be damaged if the logistics process is not similarly subject to strong management. Understanding and mitigating those risks is tackled within Trading safely, smartly, successfully.