For SaaS (software as a service) companies in Canada, there’s never been a better time to jump in. The current economic climate in the software development and distribution sector has continued to grow as the SAAS becomes more prominent for businesses and consumers alike. In 2020, it’s estimated that the worldwide SaaS market will be valued at approximately $100-billion USD. In 2017, Canada saw $1.02-billion in investments alone, showing the world that we’re more than just a contender in the SaaS industry.
While Canada is finally gaining recognition as a great opponent in the software sector, many of the companies using these products reside in the U.S. This puts a strain on the financial side of software distribution, particularly in terms of high dollar conversion.
Selling software services online means juggling foreign exchange transactions regularly. Fortunately, business solutions like those from RICE FX are here to see that Canadian businesses don’t lose money converting funds through banks.
The financial side of Canadian SaaS companies is complex once you get into the concept of foreign exchange rates. Whether you produce your own SaaS product or simply have an investment in Canadian SaaS, here’s what you need to know about your money transfer and foreign currency options.
Cloud-Based Services Make Foreign Exchange a Must
By now every Canadian knows about “the cloud”, a digital storage system that uses the internet to keep information securely within arm’s reach. One of the major advantages Ottawa based SaaS companies have over brick and mortar stores is their far reach. Using a cloud-based service means clients of Canadian SaaS companies can access software from anywhere in the world. This promotes international business and economic growth. It also provides a bit of a conundrum for Canada in that dealing with foreign currencies can be confusing.
Many software as a service firms put their faith in traditional financial institutions to do the heavy lifting when it comes to foreign exchange. The problem here is that dealing with large sums of money means there’s more to lose if the bank charges to much on the rate. So, on one side, these software companies are saving on costs of physical product production, rental fees and the like. On the other side, they’re potentially losing thousands of dollars on missed exchange rates during money transfer.
Fast Sales Lead to Missed Opportunities for Canadian SaaS Companies to Add to their Bottom Line
Most SaaS businesses are converting their Foreign currency revenue with the traditional banks and they are missing the opportunity to significantly add directly to their bottom line. Canadian SaaS companies adhere to the current market evaluations of foreign exchange rates.
However, these rates are constantly fluctuating. While most changes are minimal, when you’re dealing with thousands of dollars in revenue, that small alteration causes a big difference in the payoff.
One of the benefits we offer clients at RICE FX is spot transactions when last-minute down to the wire exchange is required. Our goal is to provide the best rate. In this way, we get you a much better rate than your bank and that additional revenue can go straight to your bottom line.
As a rapidly growing SaaS business, we want to become your trusted FX Treasury Management Partner. While we prefer to provide well-planned, hedging and exchange contracts for our clients, we understand that Canadian SaaS companies require a greater level of flexibility due to your cloud-based services and business model.
International Currency Exchange Services Can Help
Minimizing contact with global buyers is an impossibility in an industry as large as SaaS. The potential for financial loss is immense. Rather than seeking a way to avoid foreign exchange, Canadian SaaS companies benefit from finding alternative methods of conversion.
Banks can offer the same conversion rates as non-traditional converters but choose not to. Why? They have no need to be competitive in a climate where banking will always be a necessity. Instead, banks offer a near to accurate midpoint for foreign currency exchange.
This saves them time and money investing resources in continuously navigating the fluctuating currency changes and increases the pace at which they do business. In other words, your local bank relies on their long-standing creditability and reputation to give you poor rates and no service.
This is where an international currency exchange service like RICE FX is the best option for financial success. With more than 25 years of experience in the foreign exchange sector, we understand the importance of every decimal point in a foreign transaction. Our services are completely transparent as our goal is to become our clients Trusted FX Treasury Management partner.
For more information on RICE FX and how working with a private foreign exchange conversion specialist could help your SaaS company, contact us today using the form below.