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Case Studies

Bidding Farewell to Wire Charges: Redefining Finances at SPI Systems

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TLDR: SPI Systems & Services Inc. - A Financial Turnaround Story with Finofo

The Challenge:

SPI Systems, an Ontario-based lab equipment specialist, was grappling with hefty wire charges and cumbersome financial processes in their US transactions. Their growth was being stifled by these unnecessary costs and inefficiencies.

Finofo to the Rescue:

Enter Finofo. We revolutionized SPI's financial dealings by:

  • Localizing US Payments: Now, SPI operates like a US local, slashing those pesky wire fees.
  • Streamlining Currency Exchange: We offered smarter, cost-effective currency conversions, making every dollar count.

The Game-Changing Results:

  • Massive Cost Savings: SPI waved goodbye to about USD 5,760 annually in wire fees.
  • Stronger Supplier Relationships: Quicker, smoother payments meant happier partners.
  • Market Agility: SPI's newfound financial flexibility has them moving faster and smarter in the market.

The Bottom Line:

Finofo didn't just save SPI money; we sparked a new era of growth and efficiency. It's not just about cutting costs; it's about empowering businesses to reach their full potential.

Explore the complete case study in detail here:

The SPI Systems Story

SPI Systems & Services Inc., a rapidly expanding firm in Ontario, Canada, is known for its specialization in the design, supply, and installation of lab casework, fume hoods, and various laboratory equipment, and has built its reputation through years with a diverse clientele. SPI Systems & Services Inc., though successful in its sector and similar to other chemical companies in sourcing materials from the USA, encountered specific challenges in managing supplier transactions and maintaining effective relationships.

Balancing USD Transactions with Growth

For any business, especially one like SPI Systems & Services Inc., acquiring raw materials is crucial, as it significantly influences the company's unit economics and growth trajectory. Despite having its customer base primarily in Canada, SPI Systems procures its materials from the US, conducting transactions in USD. This necessitates a payment process that is both efficient and cost-effective.

" We need to make payments in USD and handle invoices in the same currency. Currently, we're using the largest Canadian bank for these transactions, which facilitates the conversion and transfer of funds. Our orders are often of small value but are frequent and repetitive. As part of this process, we used to send 12 wires per month, each costing $40 USD, adding significantly to our operational expenses."

David Johnson, Senior Manager at SPI Systems & Services Inc.

Under the current financial operations, SPI Systems & Services Inc. incurs significant costs due to wire and transfer fees. In their routine transactions, like sending USD to suppliers, SPI faces charges from both their local bank and the recipient's bank. Additionally, a concealed percentage spread for currency conversions by banks further amplifies their financial load. Compounding this, SPI confronts a direct annual loss of approximately USD 5,7601 in profits, a consequence of these avoidable banking charges during wire transfers. This loss, which could have been allocated effectively within the company, escalates with the increase in transaction frequency, posing a larger financial challenge as SPI continues to grow and expand its operations.

Streamlining Finances and Forging Stronger Ties

Finofo's introduction to SPI System's financial operations marked a significant turning point. Our platform offered a comprehensive solution to the challenges they faced:

Localizing SPI's US Payments:

Finofo's integration enabled SPI Systems to operate like a US local entity, streamlining payments to US suppliers and cutting significant wire transfer fees, thus substantially reducing their operational costs.

Additionally, Finofo's system enhances SPI's ability to manage supplier payments within the US efficiently. SPI strategically deposits Canadian dollars into its Finofo account, which are then converted to US dollars. These USD funds are maintained in a US-domiciled account, enabling SPI to seamlessly transfer USD from its US account directly to its suppliers' US accounts. This approach streamlines the payment process further, ensuring swift and efficient transactions and strengthening SPI's financial management in cross-border operations.

Optimized Currency Exchange: Finofo's platform offered algorithmically determined spreads on transactions, providing SPI Systems with a predictable and financially beneficial arrangement, especially for recurring payments to suppliers.

Improving Supplier Relations: The ability to effortlessly transfer funds between CAD and USD accounts through Finofo quickened payments to suppliers, thereby increasing operational efficiency and strengthening supplier relationships.

Cost Savings and Enhanced Market Agility: With Finofo's fixed spreads, SPI Systems realized savings on every recurring transaction and eliminated the annual USD 5,760 expense incurred from wire transfer fees, boosting their financial agility in the market

Finofo's innovative approach is a game-changer for small businesses like SPI Systems, injecting vital funds back into their banks and significantly contributing to their growth and expansion.

Catalyzing Efficiency : The Road ahead

The future looks promising for SPI Systems, thanks to their Finofo partnership. The collaboration has ushered SPI Systems into a new era of growth, marked by cost efficiencies, enhanced supplier relations, and improved operational and financial performance, paving the way for sustained business success.

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1 SPI Systems & Services Inc.'s annual cost calculation for wire transactions is based on a $40 USD fee per transaction with an average of 12 transactions per month.
This equates to an annual expense of $40 x 12 x 12 (months) = $5760

Karthikeyan Sundaram