Question 11
11. We wish to extend our UK business in small-value items to other countries, but doubt whether we can do this profitably. Our bank manager has said that he will accept cheques of low values drawn on foreign bank accounts but warns that these may take weeks to clear and we are worried that bank charges could be too high to give us acceptable margins. Is there a way round this problem?
The Question raises a complex of issues. Specifically on getting paid, you should consult a bank about opening an account in each country concerned to receive payments in local currency. You can thus arrange for payments to be pooled and the aggregate transferred to your account in the UK at whatever intervals you choose. Such a system can be set up in many European and other countries through the international department of Girobank PLC, Bridle Way, Bootle, Merseyside GIR 0AA, tel. 0151 966 4595, website www.girobank.co.uk, Or any of their regional offices; transfers are made at a very low flat rate, that is the cost does not include a percentage of the value transferred and can include conversion to sterling and immediate transfer into an account with another UK bank if you want it. Some other banks now offer comparable services, so you might usefully ask about these and compare charges. When you have worked out how you could operate and the likely costs and cash flow, you can decide how to price your products to give you adequate margins.
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