Most businesses are now able to sell their products and services globally. Inevitably, a percentage of your international clients will want to pay you in their home currency.
Meaning that if you are not set up to process foreign payments you could end up having to say no to that custom. Something that most firms simply cannot afford to do, in particular at the moment. If you would like to expand your operations abroad this article is for you – we are going to explore how to set your business up for foreign currency payments.
Accepting payments in other currencies will cost money
The first thing to be aware of is that there is no free way to accept and convert foreign currency payments into your home currency. You need to be aware of this and understand what the costs are. If you do not, it is all too easy to end up losing rather than making money. However, there is a lot that you can do to reduce those costs.
Investigate using a global payments service
One way of keeping on top of the costs is to use a specialist international payments service. Their fees tend to be lower than the ones that most banks charge. So, you can potentially save money that way. Although you should always double-check that this the case.
The best global payments services will set processes up so that you can invoice and accept your customers’ home currency. But you will then receive the payment into your business account in the currency that you use.
Set your accounts up the right way
This is an important facility because it makes keeping track of your business accounts much easier. You are not left guessing what exchange rate the tax authorities will use when assessing your tax return.
Plus, of course, your business accounts must be accurate. Dealing with just one currency will make that much easier to achieve. If, for some reason, you do not wish to do this, read this article to learn how to set your business accounts processes up to handle multiple currencies.
Be ready to adjust your prices regularly
Many business owners only review their prices once a year or when overheads like materials and labor go up. For most, this approach works ok. They rarely end up selling products or services at a price point that leads to them losing money.
However, firms that work regularly with customers from abroad need to be a bit more careful about how often they review their prices. They have to be constantly aware of what the exchange rate is doing. It is not unusual for values to rise or fall by several percent over just a few days.
Using the above tips will make it easy to start accepting payments in foreign currencies. If, for some reason, you do not wish to do that you could insist that your foreign clients pay you in your currency. However, you need to realize that doing so could lead to some customers deciding to use one of your competitors instead.