If you haul north-south, no doubt you’ve learned a few basic lessons about stretching your dollar. First, open a U.S. dollar account. Most notably, this allows you to operate without constantly having to exchange cash, a process that can literally nickel-and-dime you into oblivion. This account is where you keep the cash reserves that will help you weather the storms of currency fluctuations. Second, exchange money wisely. As your U.S. account balance grows, you’ll want to begin transferring it into your Canadian account. The question is how.

“Currency exchange issues are a very significant aspect in the profitability of Canadian trucking companies that have U.S. revenue,” says John Matheson, an investment adviser with BMO Nesbitt Burns Capital Markets. “One area to watch out for is not to just blindly exchange your U.S. dollars at the local bank branch. Be careful when you cash U.S. money to make sure you’re getting the best rate of exchange possible.”

Andre Ouelette, president and general manager of West Rim Express Lines in Surrey, B.C., says trying to figure out if the dollar is going up or down can be a frustrating experience. Instead, his company exchanges its U.S. currency on a regular basis every month. “When everybody says the Canadian dollar is going to go up to 70 cents, it surprises you and drops to 64. You can’t play that game. It’s up one month and down the next,” he says. “So we just do it on a set date on every month, shopping around for the best price we can on that day.”

It’s a worthwhile exercise. If you’re exchanging sums of $100,000 or more, there are financial companies which will offer preferred rates-rates that could result in substantial savings. For example, when the Canadian dollar is sitting at $0.65 US, the true rate of exchange is $1.5385 CDN per U.S. dollar. A bank would probably offer you $1.52-keeping nearly 200 basis points (2%) for itself. Some investment companies might charge only 25 basis points (a quarter of a percent) for that same U.S. buck.

Here are five more tips for managing your hard-earned greenbacks:

Put Away Your Canadian Credit Card:

Just as they would anywhere, your drivers will face unavoidable expenses in the United States, for things like tolls, meals, maintenance, and accommodation. One of the most costly ways to buy these things is with a Canadian-dollar credit card. Not only will the rate of exchange offered by the Canadian lender be less than favorable, but there’s likely to be service charges tacked on top, as well.

“If you give your drivers Canadian credit cards for use in the United States, you’re going to lose on the exchange,” says Mike McCarron, managing partner of MSM Transportation, an expedited less-than-truckload specialist based in Bolton, Ont. “You’ll be losing precious points, there’s no question about it. It may not be a big deal, because incidentals are generally not big sums, but every bit helps.”

While cards are an excellent way to keep accounting simple, it’ll be worth it to get U.S.-dollar credit cards, or debit cards linked to a U.S.-dollar account.

Separate Your U.S. Expenses:

As your U.S. revenues grow, your U.S. expenses will play a greater role in your accounting process. Sam Barone, a transportation consultant based in Nepean, Ont., says a currency-management strategy begins with monitoring how much revenue you derive in U.S. dollars, as compared to your expenses. “If most of your revenue is in U.S. dollars and your expenses are mostly Canadian, you’re going to have a foreign currency translation that’s very positive,” he says. “By the same token, if it’s the other way around, your foreign currency translation is going to be negative. And the greater the negative influence, the more risk-mitigating factors you’re going to have to use.”

Matheson points out that the expenses themselves will naturally reduce your need to exchange dollars. “Now you’ve got an outflow of U.S. dollars as opposed to only an inflow. It mitigates against fluctuations,” he says. “If you’ve got $2 million in U.S. revenue, and $1 million in U.S. expenses, now your currency exposure is only $1 million.”

Rethink Pricing Strategies:

Pricing your U.S. work will require a new set of rules, says Barone. “Not only do you have to price to withstand competitive bids, but you have to mitigate currency fluctuations that are going to hit you when you translate your revenues into Canadian dollars.”

Building a buffer into the price will make you less vulnerable to the whims of the currency market. In an especially competitive market, that may not be possible, though, and ultimately the value of the Canadian dollar is going to determine how profitable your contract is.

“If I’ve structured a deal a couple of years ago and the U.S. dollar has strengthened since then, I’ve gained. If the Canadian dollar has strengthened significantly, I would have a problem,” says McCarron. “That’s when you have to say to your customer, ‘Hey, this deal doesn’t work any more, and here’s why.’ ” On a $10,000 US job, every one-cent change in the value of the Canadian dollar represents about $250. In a period of high volatility, that can quickly add up.

Hedging & Options:

“Larger trucking companies, where U.S. revenue measures in the millions, should have a formal currency hedging program. Knowing they’ve got U.S. revenue coming in, they would sell U.S. dollars forward in the market,” advises Matheson.

If you sell the dollar forward in the market, you’re guaranteeing that for a set period of time, you’re going to get a certain price for your U.S. dollars. For example, let’s say the Canadian dollar is trading at $0.64 US. If you lock in the price, you’re guaranteed $1.56 CDN for every U.S. dollar you exchange. If the Canadian dollar goes up to $0.68 US, you win because now the true exchange is only $1.47.

But if the dollar goes the other way, say to $0.61 US, you’d get hurt because now you would have been getting $1.61 CDN, but you’ve already got them sold for $1.56.

“Hedging is really the process of buying insurance,” says Peter Sacks, president of Toron Capital, a financial risk-management firm. The problem is there is a potential downside if the Canadian dollar strengthens.

That’s where options come in.

“An option is typically a far more expensive type of insurance,” says Sacks, “but it offers greater protection.”

Essentially, you’re purchasing an option but not an obligation to sell your U.S. dollars at a stipulated rate for a set period of time. If the Canadian dollar goes down during the span of your option contract, you can just let the option lapse and you’re only out-of-pocket the cost of the option.

The price of the option contract is variable, depending on the current value of the Canadian dollar, the strike price of the option, the length of the contract, and the current volatility of the currency. While forward contracts can be in any amount, options don’t typically transact in amounts under half a million dollars.

“It’s relevant to any trucking company-small, medium and large-that does a certain amount of business in the United States,” says Matheson.

Work a Plan:

“One of the most difficult things for company executives to get over is that they should be spending money to hedge their U.S. revenues,” says Sacks.

“The principle is to take volatility out of your earnings. You don’t want to have some extraneous influence, like currency risk, detract from your earnings,” he says. “Get rid of those windfall gains and losses. Obviously the windfall gains are nice, but when the objective is to inject stability into your earnings, then you shouldn’t mind giving up some of the windfall gains to eliminate the windfall losses.”

The potential for benefiting from changing currency prices may look tempting, but it’s a whole other game.

“Remember that your business is trucking,” says Sacks, “it’s not playing the currency markets.”