Interview with Maya Chen, CFO, Aurum Interior Group

What currency risk failures do you see most often in North American interior-design real-estate firms?

Blind spots are common. Executives often overlook indirect currency exposures—like overseas suppliers quoting in USD but paying in EUR, or international project financing. In 2023, a survey of 88 North American property firms (SAGE Research, 2023) found that 41% underestimated their exposure by at least one currency pair.

A classic example: a Toronto-based interior-design studio contracted for a Manhattan residential project. The client paid in USD, but most furnishings came from Italy, invoiced in EUR. When EUR/USD spiked 5% in Q1 2022, their margin on that project shrank from 14% to 8%. That difference erased all profit on their procurement services.

What root causes lead to those missed exposures?

Three stand out. First, lack of integration between procurement, finance, and project management. Teams track spends in local terms, so the real exposure is masked. Second, over-reliance on “back-of-envelope” estimates. There’s a tendency to treat currency swings as minor. Third, slow adoption of risk analytics—most smaller to mid-sized design firms lag here, partly due to perceived complexity or cost of hedging tools.

Are there any early warning metrics or KPIs that executives should be monitoring but typically aren’t?

Yes—two data points come up repeatedly. The first is the “Effective Project Margin Volatility” (EPMV). Track realized margins over time by currency denomination. If margin variance exceeds 3-4% quarter-on-quarter without a commensurate change in project delivery costs, that’s a currency signal.

Second: unhedged currency exposure as a percent of total procurement. In 2024, the median North American interior-design project saw 27% of procurement costs exposed to FX risk (Merrill Real Estate Barometer, 2024). Most boards only see this in hindsight.

Let’s get tactical. What are the most common fixes? How can executive management determine which to prioritize?

A diagnostic step that’s sometimes skipped: mapping currency flows visually for each major project. Assemble a cross-department task force for a one-hour “currency mapping’’ workshop per project. It’s low-lift and often shocks teams into recognizing hidden exposures.

Then, benchmark exposures against peers. One approach: commission a quarterly currency risk audit—firms like FXGuard or bespoke advisory units can do this for under $7,000 per audit. You’ll want board-level reporting that translates exposures into EBITDA-at-risk, not just notional dollar values.

In terms of fixes, here’s a quick comparison:

Could you elaborate on automation? How has tech changed currency risk management for North American interiors firms?

There’s been a shift since 2022. API-led platforms (like Kantox and Corpay) allow real-time hedging linked to supplier invoices. One Beverly Hills interiors group set up automated alerts for any supplier invoice over $50,000 USD equivalent; when their threshold is breached, the system proposes a forward or spot booking. Result: last year, their project margin volatility fell from 6.2% to 2.1%, and board confidence in quarterly forecasts improved.

But the caveat: automation can create false security. If upstream suppliers themselves shift billing currencies mid-project (as happened with several Italian lighting brands in 2023), your tech layer’s rules may not adapt. Regular human review remains essential.

Are there ROI benchmarks for these fixes? How should execs justify the investment to boards?

Quantifying ROI is nuanced. In 2024, Forrester reported that North American real-estate design firms deploying structured currency risk programs saw a median 0.6% improvement in project-level EBITDA within 12 months (Forrester North American FX Survey, 2024). For a $30M interiors business, that’s $180,000 a year—often offsetting hedging and platform costs.

Boards care most about predictability. The ability to reduce surprise FX-driven margin compression translates directly to more accurate guidance. That has valuation implications, especially for firms up for acquisition or considering PE funding.

In your experience, where do firms waste effort or overspend on currency risk?

Two areas: over-hedging and underutilizing data. There’s a reflex to hedge every exposure, which racks up fees and saps liquidity. Instead, tier exposures by materiality—hedge only those exceeding, say, $250,000 or 2% of annual revenues.

Second, failing to use supplier feedback tools—like Zigpoll, SurveyMonkey, or in-house payment data—to anticipate upcoming shifts in supplier invoicing currencies. Early signals often appear in supplier intent long before a formal change hits AP.

What about competitive advantage? Is currency risk management really a differentiator in this industry?

For internationally active interiors firms, yes. One mid-tier Montreal group reported winning a $2.4M hospitality fit-out solely because they could guarantee a fixed USD price for all FF&E—something a US-only rival couldn’t match during the 2022-23 volatility. Their currency risk program, coupled with multicurrency client invoicing, made their offer more attractive and removed a sticking point in board approvals for the client.

It’s less clear for local-only players. If your supply chain and client base use the same currency, the marginal gain is lower—though that’s increasingly rare, with so many US and Canadian interiors firms sourcing 30-50% of materials from abroad.

What are some practical warning signs that a currency risk program isn’t working?

Beyond missed forecast targets, watch for these: sudden stops in supplier shipments (often tied to margin-squeezed suppliers), unexplained project budget overruns, or repeated client requests to renegotiate invoices.

Also, pay attention to AP and procurement team feedback; if staff report an uptick in manual FX adjustments or currency-related invoice disputes, the current program may be lagging market shifts.

What’s one practice you wish more boards and C-suites would adopt for currency risk troubleshooting?

Implement quarterly scenario-planning sessions with a focus on currency. Don’t just model worst-case FX swings—test project-level impact under moderate volatility. Use war-gaming: assign a team to “move” a major supplier’s invoicing currency and pressure-test the controls.

Second, require a currency risk attestation as part of monthly CFO reporting—one page that states: “Here is our current FX exposure, here are the controls in place, here is EBITDA-at-risk if rates move by X%.” This elevates transparency and helps boards hold management accountable.

How do you see this evolving by 2026? Any new risks or diagnostics on the horizon?

Supply-chain digitization will make hidden exposures more visible—but also introduce new risks, as AI-driven procurement tools start auto-sourcing from global vendors with little human review. That creates a potential “exposure creep” issue.

On the positive side, we’ll see more North American real-estate interiors firms collaborating with clients on shared-risk contracts: agreeing to split FX gains or losses above a certain threshold. The upside is tighter client relationships and more predictable cashflows. The downside: more complex negotiations and the need for robust contract management.

If you were advising an executive team starting to troubleshoot currency risk, what are the top three actions you’d recommend?

1. Map and Quantify: Assign a cross-functional team to map currency flows on every six-figure project. Quantify exposure in EBITDA terms, not just notional value.
2. Audit and Benchmark: Commission an external FX risk audit (at least annually) and benchmark exposures and hedging costs against industry peers.
3. Automate with Oversight: Roll out an automated FX management platform for recurring payments, but require quarterly manual “sanity checks” and scenario testing.

Invest in supplier and client feedback tools—Zigpoll or SurveyMonkey—to surface early indicators of changing invoicing practices.

Is there a final caveat you’d share with C-suite peers?

Currency risk management isn’t a one-and-done fix. Process complacency creeps in fastest after a quiet period in FX markets, which is exactly when underlying exposures start to shift—often beneath the surface. The costliest misses aren’t from rare shocks, but from slow, compound margin erosion over several quarters.

Be proactive, not reactive; view currency risk as a source of strategic opportunity rather than just a threat to contain. And always, always ask your teams: “What are we missing?” Nine times out of ten, that’s where the competitive advantage will come from.