Treasury & Forex Advisory · Question

How do I find out how much foreign currency risk my business carries?

Short answer

List every amount that will be received or paid in a foreign currency, group it by currency and by the month cash is expected, then net inflows against outflows. The remaining difference in each currency and month is the risk you actually carry. Doing this on a simple sheet, refreshed regularly, is enough for most small businesses.

In more detail

Start with a plain spreadsheet and gather four sources of foreign currency items.

Export receivables: invoices raised, shipments made and orders confirmed but not yet shipped.
Import payables: supplier invoices, advance payments and orders placed.
Foreign currency borrowings, including instalments and interest.
Other items such as royalties, software subscriptions or travel bookings priced abroad.

For each item record the currency, the amount, the expected settlement date and how firm it is. A shipped invoice is firm. A forecast sale to a repeat buyer is not, and it should be marked as such.

Group the items by currency and by month. Within each group, subtract payments from receipts. If you export in one currency and also import materials priced in the same one, only the difference is truly open. That difference is what a hedge, if you choose one, would be sized against.

Then look at size relative to your business. A net open amount that is small against your monthly profit may not need action. One that could erase a quarter of margin deserves attention.

Check dates, not just totals

Two currency amounts that look balanced in total can still be mismatched if one arrives months before the other. Timing gaps carry risk too.

Finally, note any rupee-priced contracts that quietly depend on a foreign input. If your selling price in rupees follows an imported commodity, you have an indirect exposure that never shows up as a foreign invoice.

Key points

Gather receivables, payables, foreign loans and smaller overseas items into one list.
Record currency, amount, expected date and how firm each item is.
Net inflows against outflows within each currency and month.
Compare the net open amount with your margin to judge whether action is needed.
Look for indirect exposure where rupee prices follow imported inputs.

Who this applies to

Exporters and importers who have never measured their overall currency position.
Finance heads preparing a treasury policy or a review for lenders.
Owners with foreign currency loans alongside trade flows.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority. Lalsar Holdings' financial advisory and financing work is advisory and facilitation only. Lalsar Holdings is not a lender. Sanction and disbursement of any credit facility is at the sole discretion of the partner bank, NBFC, or financial institution involved, subject to their own eligibility criteria and credit policy.