Charges for getting paid in foreign currency
Thread poster: Vera Ustinov

Vera Ustinov  Identity Verified
Local time: 15:22
Swedish to German
+ ...
Nov 22, 2006

Dear colleagues.

I have a customer abroad who gives me significant volumes of regular work. Due to an automated order processing system, the rates were agreed in his non-EUR currency, which I did not expect to be any problem. Upon receiving the first invoice I realized that my bank charged 15 EUR for transferring the invoice sum to my EUR account in Germany. The first invoice sum equivalized about 900 EUR, but there will be smaller invoices as well. All my other international customers pay in EUR, so it does not seem to be a general problem.

Now I would like to ask the proz.com community for feedback and advice: Do you think it is acceptable to pay for getting paid? Are there any alternatives I could offer? Can I invoice the foreign currency and add a clause that the invoice sum equivalence in EUR is to be transferred to my account, according to the actual day´s currency exchange rate? In that case, which exchange rate would be decisive? And, last but not least: Do you think taking up this issue with the customer might be judged as unprofessional or narrow-minded?

Any feedback will be highly appreciated.

Kind regards
Vera


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avantix  Identity Verified
Netherlands
Local time: 15:22
German to Dutch
+ ...
2 options Nov 22, 2006

I have also a few clients who pay in foreign currency. In that case I use one of the two following options:

1. If your client is willing to pay through PayPal or Moneybookers, let them do so and only transfer the money to your bank account when you have an acccumulated total.
2. If your client is not willing to pay through Paypal or Moneybookers, collect your PO's and agree on sending an invoice once a month or even once in three months.

In both cases you'll have to pay the charges only once.


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Samuel Murray  Identity Verified
Netherlands
Local time: 15:22
Member (2006)
English to Afrikaans
+ ...
Don't you always pay anyway? Nov 22, 2006

Vera Ustinov wrote:
Upon receiving the first invoice I realized that my bank charged 15 EUR for transferring the invoice sum to my EUR account in Germany.


Are you sure this is a transfer fee and not simply a currency conversion fee? If you change from one currency into another, the converter agent charges a fee (usually a percentage of the amount). This is normal (at least, for me it is, because the currency I get paid in is not the currency I withdraw in).

Do you think it is acceptable to pay for getting paid?


Sure... its the price of doing international business. Even if you specify to be paid in your own currency, you can't guarantee that any intermediary banks won't charge additional fees (such as fees for handling non-native currencies).

Do you think taking up this issue with the customer might be judged as unprofessional or narrow-minded?


Not at all, but I think the customer may have thought that you knew about the fees if you had agreed to agree to being paid in his currency. Still, one should not assume the client will be unreasonable, so if you want to renegotiate the payment terms because you didn't have all the facts, try it.


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Nicole Schnell  Identity Verified
United States
Local time: 06:22
English to German
+ ...
Same here. Nov 22, 2006

I once talked to my largest client (very abroad) about how we could optimize payment options, because my bank is charging me a total of US$ 30 per incoming wire transfer. However, I learned that the agency is paying horrendous fees themselves for each transfer and I respected their wish to reserve the right to choose how payments are conducted. I am paid on a monthly basis, but we figured out a payment system that benefits both sides, alternating between wire transfers and Paypal and depending on how many UD$$$ they have available at this time to save on currency conversion fees.

While doing my taxes earlier this year I fell flat on my [bleep!] when I found out how much money I had to pay for bank or automated payment fees during the year. My CPA told me to simply live with this nuisance as it is fully tax deductible.

The only advice I can provide is to open up as many payment options as possible. Paypal, Moneybookers, accepting credit cards, debit cards, electronic checks and what not. It's an ordeal, though, and I grew quite an aversion to bookkeeping..


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Vera Ustinov  Identity Verified
Local time: 15:22
Swedish to German
+ ...
TOPIC STARTER
currency conversion fee Nov 22, 2006

Are you sure this is a transfer fee and not simply a currency conversion fee?


Just to clarify: You are right, Samuel, this is a currency conversion fee. It may sound strange, but by now I never had to pay a cent for receiving my money, because all invoicing was done in EUR.


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sokolniki  Identity Verified
United States
Local time: 08:22
English to Russian
+ ...
Postal money order Nov 22, 2006

I had no idea that this payment option exists for those clients you have abroad (of course in addition to Paypal, etc.). I received my payment from Japan by certified mail, and my US bank did not charge any fee since the money order was in US dollars. The only extra the Japanese agency had to pay was postal fees. Some companies are still very much against using Paypal or Moneybookers, so here is another option.

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Rebecca Lowery  Identity Verified
United Kingdom
Local time: 14:22
French to English
Have you considered a foreign currency account? Nov 22, 2006

I'm based in the UK but the majority of my work is paid in Euros. If I pay a Euro cheque into my Sterling account I'm charged £10.50 for each cheque which is a big chunk out of the profit of a small job. So I've opend a Euro account with my UK bank. There are still charges but to pay in cheques under £100, it's free and the most I've ever been charged is £9. The money stays in Euros in the account but if I want to transfer Euros to my Sterling account, the exchange rate is the bank's exchange rate.

Maybe ask at your bank if they offer foreign currency accounts but see if you can open up a personal one NOT a business one (as the charges are a lot more if it's in a business name).


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ntext  Identity Verified
United States
Local time: 08:22
Member
German to English
+ ...
Say what? Nov 22, 2006

Nicole Schnell wrote:

my bank is charging me a total of US$ 30 per incoming wire transfer.


You should get an account with a different bank. My (US-based) bank doesn't charge anything for incoming wire transfers.


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peiling  Identity Verified
Germany
Local time: 15:22
Chinese to English
+ ...
Which bank is that? Nov 22, 2006

Pray tell.

Norbert Gunther Kramer wrote:

You should get an account with a different bank. My (US-based) bank doesn't charge anything for incoming wire transfers.


[Edited at 2006-11-23 01:57]


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Daina Jauntirans  Identity Verified
Local time: 08:22
German to English
+ ...
Which bank, Norbert? Nov 23, 2006

Mine charges $10 per incoming wire transfer. It's *bleeping* Citibank.

As for what to tell your customer - I have negotiated a "bank fee" line item on invoices with one customers. Another customer would pay me from their US office. With others I simply invoice monthly or when the amount reaches, say EUR 500, and eat the fees.

It is scary when you look at the total at year-end, but as the above poster said, the fees are tax deductible as a business expense.


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Nicole Schnell  Identity Verified
United States
Local time: 06:22
English to German
+ ...
No fees?? Nov 23, 2006

Norbert Gunther Kramer wrote:

You should get an account with a different bank. My (US-based) bank doesn't charge anything for incoming wire transfers.


I have a business account at Washington Mutual. We started out with a monthly flat fee for banking in general, which got waived eventually and they started charging for each and every transaction individually...

Which bank are you with, Norbert? Thanks!


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Daniel Ganor  Identity Verified
Israel
Local time: 16:22
Member (2006)
English to Hebrew
+ ...
One of the best solutions is negotiating with your bank Nov 23, 2006

I have found out that they can give enormous discounts on all fees. Of course they prefer not to. I have explained that I receive many wire transfers and therefore am entitled for a discount. That made the trick! If not, you can always move(or "threaten" to move) to another bank.

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Vera Ustinov  Identity Verified
Local time: 15:22
Swedish to German
+ ...
TOPIC STARTER
Thank you! Nov 23, 2006

Dear colleagues,

Thank you all very much for taking the time to give your very interesting input which shows me I will have to negotiate with both the bank and the customer.

Have a nice weekend (and a lot of well-paid and interesting work)

Vera


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vera12191  Identity Verified
Germany
Local time: 15:22
Member (2007)
English to Russian
+ ...
2 Options to avoid fees Nov 28, 2006

Hi Vera,
There are 2 options to avoid currency exchange fees: (a) your customer wires payments in EURO; (b) your customer ticks the box "all foreign costs are covered by the sender/no chargers or fees are covered by the payee" in the payment order with his/her home bank.




[Edited at 2006-11-28 09:13]


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Melina Kajander
Finland
English to Finnish
In the UK, you always have to pay... Nov 29, 2006

I don't know what's the situation in Germany, but here in the UK nearly all banks charge £6-£10 for ALL incoming foreign wire transfers (for over £100 or similar), no matter what the currency... It sounds like the situation is better in Germany, then.


(I have found only one UK bank that doesn't charge, Nationwide Building society, but I've had some trouble with payments not coming through/bouncing back to the payer with that account...)


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