Basis for Buying Foreign Currency

Before the application, the company needs to understand to whom, for what and when it will transfer the currency. UBC specialists analyse the contract, invoice, payment schedule, recipient details, corporate decisions and performance documents where already available. The purchase amount should correspond to the obligation and take into account foreign-currency balances considered by the bank under current rules.

Availability of the operation is confirmed for the planned purchase and transfer date. NBU Resolution No. 18 is updated regularly, so the contractual basis, type of payment and period for using the purchased currency are checked immediately before the application.

Before the foreign-currency purchase application, the bank checks the obligation under the selected contract: contract, invoice, amount, currency, recipient and date of the future transfer. The finance employee prepares a clear explanation of what is being paid for and how the purchase is connected with the Ukrainian business's activity.

The lawyer analyses the contract and signatory authority, the accountant the amount, currency and accounting treatment, and the finance employee the payment details and hryvnia funding. The director approves the payment date and commercial terms. One package is submitted to the bank in which the contract, invoice, application and payment purpose describe the same purchase.

1. After the purchase and transfer, keep the bank confirmation, exchange rate and statement together with the payment documents.

The working folder for the foreign-currency purchase contains the contract, specification or order, invoice, payment-details sheet, calculation of the hryvnia amount and bank correspondence. With this package, the accountant and director see the basis for every amount before the application is submitted.

• Contract and appendices, invoice, foreign-currency purchase application, payment details and bank statement
• Contract and Annexes
• Invoice, Acceptance Certificate or Goods Documents
• Bank Statement
• Explanation of Business Purpose

Documents for the Bank and the Payment

Before submission, the names of the parties, contract and invoice numbers and dates, currency, amount and payment purpose are compared. The actual purchase is also compared with the information the bank already has about the client's activity. Discrepancies are corrected before the application is submitted to the bank.

After the purchase and transfer, the bank confirmation, exchange-rate information, fee and statement are added to the same folder. The accountant links them to the relevant invoice, while the director sees the actual hryvnia cost of the purchase and the remaining liability to the supplier.

Before each new application, the finance employee confirms the current NBU conditions and the servicing bank's internal procedure as of the transaction date. This is especially important for a new type of payment, a significant amount or an amended contract, where the supporting documents may differ from the previous purchase.

The director appoints a main and reserve employee for the banking system, exchange-rate approval and transfer of documents. Copies of contracts, invoices and confirmations are kept in a shared folder, so either the main or reserve employee can complete the payment from the agreed workplace.

The director agrees with the bank the application format, exchange rate or method of determining it, fee and submission time. For a significant amount, it is useful to request the terms of available options in advance within the relationship with the servicing bank. Accounting reserves the hryvnia and compares the payment purpose with the contract and invoice.

The purchased currency is used within the prescribed period and for the stated basis. The application, purchase and payment are kept in one calendar so that the commercial team provides the documents on time and the responsible bank employee receives the complete package before executing the instruction.

Exchange Rate, Fee and Settlement Calendar

If the company regularly buys goods in foreign currency, it is useful to prepare a payment calendar and determine an acceptable exchange rate for the margin of each shipment. The contract can provide a mechanism for changing the price, allocation of banking expenses and the parties' actions if the date is moved. This allows the director to see the purchase cost before selling the goods to the client.

Under the current NBU conditions, the bank may offer hedging instruments for trade transactions. The possibility and parameters of a forward are discussed with the bank for the actual contract. UBC can help prepare the documents and compare the bank's offer with the delivery and settlement schedule.

Send the contract, invoice, amount, currency, counterparty details, payment date and bank requirements. Add information about available foreign currency and previous payments under the contract. UBC specialists will determine the supporting-document list, clarify the wording and prepare an explanation of the transaction.

The owner or director receives an agreed package for the application and transfer, an action calendar and a list of responsible people. The cost of support depends on the type of transaction, number of payments, documents and the need to communicate with the bank in response to its requests.

After the currency is purchased, the responsible employee checks execution of the payment instruction, receipt of funds by the counterparty and the balance in the foreign-currency account. The bank confirmation is linked to the contract and invoice, while accounting records the purchase, fee, exchange rate and settlement with the supplier. If the payment relates to several shipments, the allocation is recorded in the working table. This archive helps process later payments under the contract using documents that have already been agreed.

For regular imports or services from a non-resident, a calendar of amounts, currencies, deadlines and documents is maintained. Treasury sees the future requirement, accounting prepares the supporting basis, and the director approves an acceptable rate and transaction date in advance. Before every purchase, the current foreign-exchange regulations and the servicing bank's requirements are confirmed.

After the transaction, the application, exchange rate, bank confirmation and evidence that the payment was made are kept. Actual costs are compared with the plan and the result is taken into account for the next order or pricing. UBC can help prepare the package for the bank and agree the transaction documents so that the director and accounting department perform international obligations on time.

A foreign-currency purchase can be prepared for a one-off payment or regular import settlements. A UBC specialist will analyse the basis, agree the package and explain the current bank and NBU conditions for your transaction in detail. We will be pleased to answer additional questions and help the company plan international purchases with confidence. We wish you success in business!