Key takeaways
- Hold the currencies you earn and spend.
- Pay foreign costs from foreign balances.
- Convert only the surplus, when it suits you.
- Track your net position in each currency.
A simple framework
| Step | What to do |
|---|---|
| 1. Map flows | List what you earn and spend in each currency each month |
| 2. Hold balances | Keep accounts in the currencies you use most |
| 3. Pay from balances | Pay foreign suppliers and staff without converting |
| 4. Convert the surplus | Convert only what’s left, ideally on a schedule |
| 5. Protect big gaps | Hedge large future payments with forwards |
A worked example
A Canadian SaaS company earns US$80,000 a month and spends US$30,000 on US software and contractors. Instead of converting all US$80,000 and then buying US$30,000 back, it holds USD, pays the US$30,000 directly and converts only the US$50,000 surplus. It avoids two conversions on US$30,000 every month.
Where to hold currencies
- Multi-currency fintech accounts: Venn and Loop offer CAD, USD, GBP and EUR from C$0 a month; Wise and Airwallex support 20–40+ currencies.
- Big-bank USD accounts: separate USD accounts alongside your CAD account.
Common mistakes
- Converting every incoming payment to CAD automatically.
- Holding foreign currency with no plan for when to convert it.
- Not tracking how much is exposed in each currency.
Providers that can help
Compare these providers, then request a free, no-obligation quote.
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FAQs
What is natural hedging?
Using money you earn in a currency to pay costs in the same currency, so currency moves affect both sides and largely cancel out.
Do I need a separate account for each currency?
Not always. Multi-currency accounts let you hold several currencies in one account, while big banks typically use separate accounts per currency.
When should I convert foreign currency to CAD?
Many businesses convert surplus on a regular schedule or when a rate target is reached, using a limit order or rate alert, rather than converting every payment.
Which accounts hold USD, GBP and EUR?
Venn and Loop offer CAD, USD, GBP and EUR, and Wise and Airwallex support 20–40+ currencies. Big banks offer separate USD accounts.
Sources: Published account terms from Venn, Loop, Wise and Airwallex.