- Published: September 6, 2022
- Updated: September 6, 2022
- University / College: Northwestern University
- Level: Masters Degree
- Language: English
- Downloads: 18
Cost Management Since finance and accounting covers a wide range of s including cost management, the article ‘ e-Commerce balancing Act: the Fine Art of Managing FX Risk’ has great deal of relevance to the course content. It is so because most on-line merchants have many problems and questions concerning dealing with their FX risks while serving their clients. On-line commerce has been increasing at an unprecedented rate and 275 of all on-line merchants sell their products and services to foreign markets. Additionally, only 32% of U. S. on-line merchants operate beyond their borders because they deal with local currency. In profitability analysis, the foreign exchange rates play a determinant role and the article clearly highlights the role of FX banks in fixing the problem.
The article not only highlights the current trends and challenges of e-commerce in the United States, but is also points out the ways in which on-line merchants can manage their FX risks. Essentially, the merchants demonstrate greed because they do not want to accept foreign policy and subsequently, deal with foreign currencies. They are attempting to manage their cost through avoidance of foreign levies that their products and services may attract. In this regard, the on-line merchants engage their FX banks in their attempts to produce a balanced scorecard. The major reason for this is that the third party providers are the ones who outsource FX risks for the on-line merchants.
Managing foreign exchange is a complex affair in cost accounting and the merchants in the article have to do so with the help of their FX banks. These accounting issues require in-depth financial analysis and the article brings a relevant perspective to the course content. Indeed, e-commerce requires some balancing act in order to sail though the turbulent market, especially for merchants with a global market. In finance and Accounting, foreign exchange plays an important role in determining the extent to which the on-line markets will operate. Besides, the course content compliments the article in the sense that FX banks are key stakeholders in cost Accounting as well as e-commerce. It is because different countries have different business policies that in most cases affect the on-line merchants.
“ E-Commerce Balancing Act: The Fine Art of Managing FX Risk.” HSBC Global Connections, 12 June 2014. Web. 21 June 2014. < https://globalconnections. hsbc. com/us/en/articles/ecommerce-balancing-act-fine-art-managing-fx-risk >