Your supplier held its price. Your costs went up anyway.

A supplier sends the same price list it sent in June. You order the same box of the same thing. The invoice is for the same number of dollars. And it costs you more.

Nobody made a mistake. The price did not move, sterling did. Which is fine, right up until you ask what in your system noticed.

A landed cost has more than one exchange rate in it

The supplier’s price is in dollars or euros. Your sell price is in pounds. Between the two sits a conversion that happens more than once, on different days, at different rates, and usually in different places.

• The rate on the day the order was raised, which is what your buyer had in mind when they agreed the price.
• The rate on the day the goods enter free circulation, which is what the customs value is converted at. HMRC publishes those rates at the end of each month to cover the whole of the next calendar month, and only revisits one mid-month if the commercial rate has drifted more than 5% (HMRC on converting foreign currency amounts). Customs Duty and import VAT are both worked out on that value (HMRC on working out the customs value), so the duty bill moves with the rate even though nobody changed a duty rate.
• The rate on the day you actually pay, thirty or sixty days later, which is the one that leaves your bank.

Under UK accounting rules the stock itself is frozen at the transaction-date rate and never re-translated, because it is a non-monetary item (FRS 102, paragraph 30.9). The invoice you have not paid yet is monetary: it is re-translated at the closing rate, and the difference goes through profit and loss as an exchange difference (paragraph 30.10 of the same section).

That split is why the damage is easy to miss. The margin report reads off a cost that is fixed by definition, and the money the rate actually cost you turns up several rows further down, under a heading nobody prices from.

The arithmetic, on a 2% move

Take a line that sells for 100 pounds with a landed cost of 65. That is 35 pounds of gross profit and a 35% margin.

Sterling falls 2% against the currency you buy in. The supplier has changed nothing. The same invoice now converts to 66.33.

Leave the price alone and gross profit is 33.67 and the margin is 33.7%. You have given away 3.8% of the profit on that line without a single price changing hands.

Move the price and you meet a decision most price lists make silently. To get the 35 pounds back you sell at 101.33, a 1.3% rise. To get the 35% back you sell at 102.04, a 2% rise.

Those are not the same number and they are not the same policy. A cost-plus markup rule holds the percentage. A cash-margin rule holds the pounds. Whichever yours does, it is doing it to every line, every time the rate moves.

Multiply that by a few hundred lines and a quarter of nobody looking, and it stops being a rounding error.

The dollar headline is not your rate

On 18 September 2026 GBP/USD fell 0.59% in a day to 1.3376, while EUR/GBP moved by a tenth of a percent (FX market recap, 18 September 2026). Same pound, same day, two different stories depending on who you buy from.

So one company-wide rate, updated when somebody remembers, is wrong for most of your suppliers most of the time. Currency is a property of the supplier, not of the business.

None of this is a view on where sterling goes next, and it is not meant to be. What your system does when the rate moves is a question you can answer without predicting anything.

Who reprices, how often, and in what

In most importing businesses the honest answer is one person, in a spreadsheet, once a quarter, when somebody notices.

That is a missing feature rather than a failure of attention. The purchase order knows the currency. The stock record knows the cost. The price list knows the margin rule. If nothing joins them up, the recalculation is hand work, and hand work happens when there is time, which is usually after the quarter that needed it.

Two things drift in between, in opposite directions, and neither appears on a dashboard. Margin leaks on the lines where the rate went against you. And on the lines where it went your way you are quietly dearer than you need to be, which costs you the order instead of the margin.

Six questions for your own system

None of this needs a new platform. It needs six things to be answerable about the one you already run.

• Does a stock line carry a landed cost, goods and freight and duty, or only the supplier’s invoice price?
• Does each supplier carry its own currency, and does a purchase order record the rate it was raised at?
• When the rate moves, what recalculates on its own: nothing, the cost, or the cost and every sell price derived from it?
• Can you separate the margin on what you sold from the margin on replacing it, when the two were bought at different rates?
• If you buy forward, does the contracted rate reach the system that prices the goods, or does it stay in the finance mailbox?
• Who reprices, how often, and what are they doing it in?

Answer those and you know which kind of business you are running: one that handles a rate move, or one that absorbs it.

If you would rather talk it through than read another framework, send us a message.