FIRMS doing business overseas are losing money by failing to manage their foreign exchange transactions sensibly.

That is the message from Justin Pryor, founder and managing director of Lynx Treasury Services in Bromley.

He says small and medium sized enterprises (SMEs) need to be smart to be competitive but they fail to exploit the opportunities available to them when it comes to foreign currency.

Lynx is a new foreign exchange and deposit brokerage service.

Mr Pryor said: "Today, more and more SMEs have established overseas trading relationships, but the vast majority of them are losing out when it comes to managing the foreign exchange transactions associated with these relationships, or getting the best rates for money on deposit."

He claims that SMEs could save themselves hundreds of thousands of pounds each year by shopping around for the best rates.

"Companies are happy to shop around for products such as insurance, but when it comes to foreign exchange and deposits, people seem reluctant to research the best deals.

"I think this may be due to a perception that it’s a complicated process. And also because there is a degree of ignorance about the implications minimal differences in rates can have on the bottom line of a deal."

For example, a retailer importing from China would probably have to pay a supplier in US dollars and buy them through the bank at a rate of, say, 1.760.

But by shopping around, says Mr Pryor, the retailer could probably secure a rate of 1.78.

"On a £250,000 deal, that will save the retailer $3,750," he said. "And over 12 months’ worth of deals, that soon adds up."