Payments from Abroad, Charge Fee or Not?

looknohands

I'm trying to figure out how not to lose a bit of money on my next payment for a client. The client is based in the US, and the first payment was a bit of a pain.

My first bill for the client was £670, unfotunately they sent me a cheque in the dollars equivalent taken on the day they sent the cheque to the UK, even though I billed in pounds... obviously a problem already as exchange rate can change. I cashed this cheque in and it took a while to go through and I ended up with £640 clearing, £30 for the cheque / exchange rate.

Does anyone else deal with foreign clients and what's your advice on payments, is it unethical to charge payment fees? If they paid me by bank transfer i'd only be charged £7 and I'd have no problem taking that hit, but the cheque route I think is more like £20 fee.

Also is it expected that the sending client pays in the vendors currency? Considering I quote them in pounds, I'm just wondering if I should have a word about this before sending invoice.

My next bill is £5k so I'm a bit more concerned about losing out, if it's 5% again that'll be a hefty chunk.

Finefoot

I think you should clarify the amount is in pounds sterling. They can do a bank transfer using your IBAN number.

paddyrg

Yep direct bank transfer or a service like CaxtonFX which may be slightly cheaper. It's unreasonable for you to swallow exchange rates and fees unless that was the agreement. No other vendor would accept that, neither should you. £670 means £670, and if they bank in dollars, rubles, Egyptian pounds, dirham, euros or toffees, that's fine, but they send you GBP.

martindow

Bank transfers can also incur fees so you will not be guaranteed to receive the full payment.

There usually is a choice of sender pays fees, shared fees or recipient pays fees. Often the default is shared fees, so your bank or an intermediary can take some cash along the way.

WhyNot?

looknohands wrote: »

I'm trying to figure out how not to lose a bit of money on my next payment for a client. The client is based in the US, and the first payment was a bit of a pain.

My first bill for the client was £670, unfotunately they sent me a cheque in the dollars equivalent taken on the day they sent the cheque to the UK, even though I billed in pounds... obviously a problem already as exchange rate can change. I cashed this cheque in and it took a while to go through and I ended up with £640 clearing, £30 for the cheque / exchange rate.

Does anyone else deal with foreign clients and what's your advice on payments, is it unethical to charge payment fees? If they paid me by bank transfer i'd only be charged £7 and I'd have no problem taking that hit, but the cheque route I think is more like £20 fee.

Also is it expected that the sending client pays in the vendors currency? Considering I quote them in pounds, I'm just wondering if I should have a word about this before sending invoice.

My next bill is £5k so I'm a bit more concerned about losing out, if it's 5% again that'll be a hefty chunk.

Not much you can do about it now as it sounds like the terms of the contract have already been agreed.
So you certainly can't go and unilaterally start adding charges.

What I suggest you do is swallow the loss for now and put it down to experience, experience that will hopefully teach you to get your terms professionally laid out by a legal advisor so that you won't suffer such costs in future ... or at least be aware of what they may potentially be and ensure they are included in the contract agreed.

Mistral001

They should really have paid you in pounds if your invoice is in pounds. They might have known this but just sent you USD anyway. It needs to be spelled out that you will only accept such and such a currency and get it written into any terms and conditions. However, in saying that since most American companies expect to deal only in the USD, it might be worthwhile to quote your services in that currency when dealing with US clients.


I deal with a Eurozone client and always send my invoices in Euros.


PS. To answer your question. Charge a fee at your own risk (the risk of never getting any business from abroad). You are in a global market.

looknohands

Last payment went through and was international wire and I absorbed the £7 charge which is fine on £5k.

They had never paid international before (regional fast food chain), and down to in-experience on my part I had just assumed bank transfer in invoice currency would be the norm. Spoke to their project manager and she was actually very apologetic that I'd incurred the fee's and explained they'd never worked with international suppliers so was all new to them.

At least it was on the smaller invoice hey!

Thanks for your answers,