Are clients allowed to choose the cheapest currency in which to pay?
Thread poster: Astrid Elke Witte

Astrid Elke Witte  Identity Verified
Germany
Local time: 16:09
Member (2002)
German to English
+ ...
Apr 21, 2005

I have been noticing, since I have been working for quite a few clients in different countries, that they often choose the cheapest currency in which to pay my invoices.

Firstly, they do not want to pay in Euros, because their currency is a different currency. However, I need to charge in Euros, for the purposes of my own accounting. Therefore, I write the amount in both their currency and mine on the invoice, so that everybody is happy. I check the current exchange rate for the day that I write the invoice, using the most reliable online source that I know of.

What happens next is that I have to wait about two months to be paid, and meantime the difference between the two currencies has altered. Then, having been reminded a few times, the client decides to pay, but checks the current exchange rate and pays in whichever currency has devalued. They will pay in their currency if it suddenly amounts to EUR 10 less than originally. If it is EUR 10 more than originally, then they pay in Euros, at the cheaper rate from two months ago.

Is there any way to avoid this happening? Do other people have the same problem?

Astrid


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Andy Lemminger  Identity Verified
Canada
Local time: 08:09
Member (2002)
English to German
Euro Apr 21, 2005

Sure, just write your invoices in Euro. They can translate into another currency themselves...

Regards
Andy


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xxxMarc P  Identity Verified
Local time: 16:09
German to English
+ ...
Are clients allowed to choose the cheapest currency in which to pay? Apr 21, 2005

Astrid Elke Johnson wrote:

I write the amount in both their currency and mine on the invoice, so that everybody is happy.


Since you put two currencies on your invoice, you are the one who is giving the customer the choice, surely. Just put one currency on your invoice in future - problem solved!

Marc


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Konstantin Kisin  Identity Verified
United Kingdom
Local time: 15:09
Member (2004)
Russian to English
+ ...
agree 1 currency in your PO and then use that in your invoice Apr 21, 2005

You should agree payment terms (including the currency) in your PO before taking the job and then simply use that figure in the invoice.

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Alp Berker  Identity Verified
United States
Local time: 10:09
Turkish to English
+ ...
Let the customer pick one, 2 will cause confusion Apr 22, 2005

I generally let the customer pick one of the chosing and stay with it from the PO like stated above, that way they are happy and you have one currency. Generally the majority of customers go with either Euros or US dollars anyway, or I'll let them pick their local currency if it's transferable. This is of course if it feasible on your end, i.e. bank costs are not excessive for different currencies.

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Samuel Murray  Identity Verified
Netherlands
Local time: 16:09
Member (2006)
English to Afrikaans
+ ...
Clients are allowed to choose anything... but you can quote in Euro Apr 22, 2005

Astrid Elke Johnson wrote:
I have been noticing, since I have been working for quite a few clients in different countries, that they often choose the cheapest currency in which to pay my invoices.


And why not? Why use a currency which costs money? But if their choice of currency ends up costing you a lot of money instead, then you should call a halt. Me, I charge all international jobs in Euro (but I also accept USD and GBP on occasion).


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Astrid Elke Witte  Identity Verified
Germany
Local time: 16:09
Member (2002)
German to English
+ ...
TOPIC STARTER
The problem occurs mainly with British customers Apr 22, 2005

The problem occurs mainly with British customers, who are not using to dealing internationally and are uncomfortable with any currency other than GBP.

The reason I write the invoice in two currencies is that that was the procedure at a firm where I used to work, in the event that the client wished to deal in their own currency. However, I never worked in that firm's Accounting Department, so never knew what problems they had as a result. They did it because they said the client had to be made happy, above all else. That is true, of course. However, for my own accounting, I also need to write the invoice in Euros.

I guess it is just necessary to take any losses incurred. However, I do agree with them which is the currency that counts, when they place the order, and usually it is GBP. Nevertheless, if the number of GBP agreed amounts to more Euros on the date that they pay than it did on the date of writing the invoice, they quickly switch to paying the original Euro equivalent, i.e. a smaller amount of money than originally agreed in GBP. I just wondered if they are entitled to do this.


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xxxMarc P  Identity Verified
Local time: 16:09
German to English
+ ...
Are clients allowed to choose the cheapest currency in which to pay? Apr 22, 2005

Astrid Elke Johnson wrote:

However, for my own accounting, I also need to write the invoice in Euros.


Why?

If you are putting two figures on your invoice, one in Euros, one in Sterling, the figure in euros becomes irrelevant from an accounting point of view as soon as your customer decides to pay the Sterling amount. To all intents and purposes, you have given your customer two invoices and allowed him to choose which to settle. You cannot then use the other for your own accounting.

Nevertheless, if the number of GBP agreed amounts to more Euros on the date that they pay than it did on the date of writing the invoice, they quickly switch to paying the original Euro equivalent, i.e. a smaller amount of money than originally agreed in GBP. I just wondered if they are entitled to do this.


It is arguably rather petty of your customer to do this, and it is not a sign that they really value your services. However, there is no point questioning whether your customers "are entitled to do this". YOU have entitled them to do so, by putting two prices on your invoice.

Marc


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