A good deal on the quote, a thin one in the bank
A specialist vendor sells to you in US dollars. Your customer wants a sterling quote. The account manager looks up the exchange rate, adds a little buffer, and sends the quote. The customer signs six weeks later. The order is placed, the distributor invoices in dollars, and by the time you pay, sterling has weakened. The margin on the quote was fine; the margin in the bank is not.
Another account manager, on another deal with the same vendor the same week, used a different rate and a different buffer. Nobody can say which was right.
Why currency is handled inconsistently
Resellers buying in foreign currency need a consistent method: which rate, which source, what buffer, how long a quote is valid before it must be repriced. In practice, account managers make their own choices, because the quoting tool expects a sterling cost and has no idea the underlying cost is in dollars.
The rate used is not recorded, so nobody can later compare it with the rate paid. The margin report shows the loss without the reason.
| Stage | Currency risk |
|---|---|
| Quote | Rate picked by hand, not recorded |
| Quote validity | Not tied to rate movement |
| Order placed | Rate not rechecked |
| Distributor invoice | In foreign currency, converted later |
| Payment | Rate on payment date differs again |
What the currency gap costs
On high-value deals, a modest movement in rates can take a large bite out of margin. Inconsistent buffers also mean some quotes are uncompetitive because the buffer is too large, while others leave you exposed. And because no rate is recorded, the finance team cannot separate currency losses from pricing mistakes.
How to manage currency risk is a finance decision, and your finance team or advisers set the method. We make sure the method is used on every quote and that its effect is visible.
The currency-aware quoting we build
- Foreign currency costs: distributor and vendor costs are held in their original currency, not converted in advance.
- Rate source: a daily rate is loaded from the source your finance team chooses, and your chosen buffer or method is applied per currency or vendor.
- Rate on the quote: each quote line records the currency, the rate used and the date, and the quote's validity period follows your policy for foreign currency deals.
- Order recheck: when the customer's PO arrives, the current rate is compared with the quoted rate and the margin impact is shown before the order is placed, with thresholds your finance team sets for when a decision is needed.
- Invoice and payment capture: the rate on the distributor invoice and on payment is recorded against the deal, so actual currency effect can be reported.
- Reporting: margin reports split currency effect from price and cost changes, by vendor and by account manager.
Quoting with the rate built in
Account managers stop looking up rates. Quotes use the same method whoever writes them. When a PO arrives and the rate has moved beyond your threshold, the account manager and finance see the impact before the order, and decide whether to proceed, requote or use whatever arrangement your finance team has in place. Finance sees currency effect as its own line.
Is currency quietly costing you?
- You buy some software in dollars or euros and quote in sterling.
- Account managers choose their own exchange rate and buffer.
- The rate used is not recorded on the quote.
- Nobody rechecks the rate when the order is placed.
- Margin reports cannot show currency effect separately.