How FX Risk Affects Your Business – and What to Do About It

If your business trades across borders, FX risk is part of your reality. You might not feel it every day, but it’s there – in your invoices, your supplier contracts, your payroll, and your margins.

Exchange rates shift constantly. And unless your costs and revenues are always in the same currency, those shifts can directly affect your cash flow and profitability.

For small and midsize businesses, that volatility can turn a healthy margin into a shortfall with very little warning.

But the good news is, you don’t need to gamble with it. With the right tools and approach, you can protect your business from unexpected losses – and make smarter decisions about when and how you move money.

What is FX risk, exactly?

FX risk, also called currency risk or exchange rate exposure, is the risk that changes in currency values will negatively affect your business.
Say you’re a UK-based company that needs to pay €100,000 to a supplier in six weeks. You check the exchange rate today, and it’s €1.00 to £0.85. That puts your cost at £85,000.

But in six weeks, if the pound weakens, that same invoice might cost you £87,000 or more. That extra £2,000 comes straight out of your margin. And if you’re dealing with tighter cash flow or multiple suppliers, those differences add up fast.

Where FX risk shows up in your operations

FX exposure can creep into your business in several places:
- Paying international suppliers in EUR, USD, AED, or other currencies
- Receiving payments from overseas customers
- Running payroll for employees or contractors in other regions
- Settling contracts where payment is due at a future date

Even if your finance team budgets based on current rates, that forecast can quickly become outdated if the market shifts. That’s where many businesses lose money without realising it.

How FX forwards can help

FX forwards allow you to lock in an exchange rate today for a future transfer. Instead of waiting and hoping for a favourable rate, you fix the cost now and settle the payment later.

For example, if you agree to pay a supplier $500,000 in 60 days, you can book a forward contract that guarantees your GBP/USD rate now – removing the uncertainty entirely.

It’s not speculation. It’s risk management. Forwards help you:

- Protect your margin from currency swings
- Plan payments with confidence
- Simplify forecasting and budgeting
- Avoid last-minute surprises and rushed transfers

You don’t need to be a large multinational to use forwards – they’re accessible, flexible, and tailored for businesses of your size.

Managing FX risk doesn’t have to be complicated. It starts with awareness, and it improves with the right tools. At ORE, we help businesses build stability into their international payments, using spot and forward contracts with full transparency and support.

Want to see how an FX forward would work for your next transfer?



Speak to our team or open your account today and get started.