I lost $23K due to the foreign exchange

Put that coffee down. And I had a look last month, I had a look in our P L last month we'd lost $23,000 in our foreign currency losses because of. And that. And what that is in, in like bookkeeping speak is the difference in the foreign exchange rate of when you sent the invoice to when you got paid. And in that eight to ten day period, we lost 23 grand.

Wow. Just in the fluctuations of the prices.

Because we, we sent it at that day, it was paid on that day and that money had changed. And the month before it was like an increase of 11 grand. So it's really odd, man. It's a very peculiar time in terms of running a business, man.

I remember back in like, I think it was 2011.

Yeah.

We overtook them. Do you remember that?

Yeah, yeah. For like a little while.

Yeah, yeah.

And.

And that's when I got married in the States then. And so we're killing it. Oh, mate, we're like rich lining. Bought a car, drop. Why not drop 23 grand on a Mustang? Just like, why not? It's the cheapest I'll ever have the opportunity to buy this car. Bought it back and sold it pretty much straight away because it was the like cheapest opportunity you had to do it.

Amazing.

But I remember those ODA guys coming out and we're on exchange at the time and they were for the people.

In the camera od. Yeah.

It's a different special forces unit that exchanges with ours or our former unit. And so they were, they were hurting, man, like because they're getting paid in US dollars, but they're in Australia for six months or whatever. It was worth less. They were, I think that we got to like a $10 or something like that.

Yeah. I remember I went over to New Zealand once when it was like the New Zealand dollar had tanked and it was like double. And I went, remember this is years ago. I bought a pair of Oakleys and It was like 40 bucks.

Like, what is happening?

I was just in the, I was just in the airport because I wasn't, I was going to New Zealand to go somewhere else. Yeah. And I was like, did the cows buy that? Yeah, thank you very much.

Yeah.

So. But it, you know, and it's another thing I never really thought about. But then when I have a look at like our PNLs and I'm like, man, like we might need to get someone to hedge our money.

Yeah. So explain that to me. What can be done about that?

So well, first of all, you can try and reduce your cash flow cycle. Right. So what we've put in place is a meeting. So we're getting paid no more than seven days after invoicing. Okay. You can lock rates as well. You can, like, lock a rate at the day of invoice, and you have to get approval for that from the. You know, if you're the vendor, from the person that you're sending invoice to. But you can lock rates to kind of stop the manipulation of markets. Because, like, a good business would hedge.

Yeah.

So you'd have a CFO that would go pay them now, like that. Right. To give yourself the best chance. But you can also employ companies to hedge your money. So instead of it being paid to you, all their money gets paid to them. They act as, like, a suspense account, and then. Then they. They hold your money. You have to have a good amount of cash to be able to do it.

Yeah.

Because you might be four or five days out, they'll hold your money, and then they'll transfer all of your money at once on the greatest possible day, and then they take a clip of what they make you, and their job is to make you money on all. Hey, guys, you just saw a podcast. I'm excited for you. So we have a new one that comes at every single week. Go to your favorite podcasting location and make sure you check out the new episode every single week. Dropping on a Thursday.