Dealing with foreign payments and conversion rates

Giannina... Welcome to global business. Years ago when I acquired my first foreign customer, I learned that it was always best to simply quote with the letters "US" after any numbers in my contracts.

I've never had any problem because I put it out there in the beginning and regardless of the exchange rate, my fees were the same. The exchange rates either "cost" or "benefit" the customer depending on the country they were from. ...Howard

Giannina, when i deal with my clients (all of them are from either US, EU or Australia) i make it clear upfront that i charge my fee in US dollars and also i make it very clear that i will be adding all the addon fees,charges,transaction cost to the final amount to be paid by my client...

If you don't add all the cost involved in receiving money from overseas clients you will find that quiet a bit of money is lost in transaction costs and you will eventually be getting an amount which is significantly less than what you expected/negotiated in the beginning...

-Anita CM

PS: If you are using Paypal to receive money from overseas clients then this tool will come very handy to you http://ppcalc.com/

The new QuickBooks 2009 is multi-currency. You could use that to make up a quote in dollars, and give them a quote in their own currency.

I can process those payments for you and we have a tool that lets you move the conversion to your side of the equation instead of the banks. (i.e. you profit from the conversion instead of the bank) Call or e-mail me to get more details. Thanks Art T.

No problem. Art T.

We have sold international from the first sale to England. I always was told to quote in US dollars and so far it's worked. When shipping costs went up, we lost a sale because shipping alone was showing up as almost 2/3 cost of the unit to ship overseas. So we switched back to USPS and knocked it back to normal.

Whatever you choose to do, be consistent and up front with every foreign client. Changing your quote and invoice forms to indicate US dollars is the easiest way to go.

Streamline cash flow and ease of payment for client? You may choose to take payment via EFT or credit card to avoid mailing or check clearing delays. Fees for these services do offset the cost of your time to manually process or deposit foreign funds and allow you access to the money sooner. EFT or Credit Card options can simplify the payment process for clients too. Just make yourself aware of the specific chargeback or dispute policies on these services should you choose to use them.

Something else to consider. As a Web site designer, I sometimes come across international projects or clients with international customers. If you plan to do international work more often, consider what your client sees: if you list prices in US and tack on extra fees, that will be a real turn off.

If international isn't your focus, then go with all of the suggestions above. If it is your focus, find ways to quote fees in local currency and find ways to minimize the financial impact. Perhaps opening a bank account in the country that you discussing might help minimize some of the problem.

Jason Shindler

Curvine Web Solutions

Just to comment Justine, listing fees in local currency is a part of what I do as your credit card processor. Art T.