Clearquire 4 min read

How to invoice a client in another currency

Agree the currency before the work, set it before you type amounts, round to that currency's minor units, and print payment details that work across borders.

Invoicing a client abroad is mostly ordinary invoicing with two extra decisions: which currency the invoice is in, and how the money gets to you without a chunk disappearing on the way. Decide both before the work starts, write them on the invoice, and the rest is arithmetic.

This is general practice, not tax, legal, or accounting advice. Whether you charge VAT or a sales tax to an overseas client, and how you record a foreign-currency sale in your own books, depends on where you and the client are. Ask an accountant if you are unsure.

Decide the currency with the client

There are two honest options:

  • Your currency. You get exactly what you quoted. The client carries the exchange rate and any conversion fee on their side.
  • The client's currency. The client sees a familiar number and pays without conversion. You carry the rate, and the amount you receive in your own currency can differ from the day you quoted.

Neither is wrong. What causes problems is not saying. Put the currency in the quote or the contract, and put it on the invoice in the same words.

If you invoice in the client's currency, agree the amount in that currency, not "£1,000 converted on the day". A fixed figure is checkable. A figure that depends on a rate is an argument waiting for a payment date.

Set the currency before the amounts

On the invoice, every figure (unit prices, discount, tax, shipping, totals) is in one currency. Choose it first, then type the amounts.

In Clearquire, the currency is set under Invoice, next to the number and dates. GBP is the default. USD, EUR, AUD, CAD, and fourteen more are in the list. Set it before the line items so the symbols and rounding match from the first line.

Round in that currency

Most currencies have two decimal places. Some have none. Totals should be rounded to the minor unit of the invoice currency, per line, and then summed, so every figure on the page adds up to the total on the page. The order of operations and a worked example are in how to calculate discount and tax on an invoice.

Clearquire rounds each line and total to the invoice currency's minor units. If the currency has no minor unit, the totals are whole numbers. You do not need to pre-round the unit prices; enter them and read the totals.

Tax on a cross-border invoice

Whether tax applies, and which rate, is a question for your tax authority, not this page. Three practical points:

  • If no tax applies, say so on the invoice rather than leaving the line blank. A short note in the notes field ("No VAT charged; supply outside the scope") saves a query. Use the wording your accountant gives you.
  • If you are registered for VAT or a sales tax, your registration number belongs on the invoice. Clearquire has a tax number field for both the seller and the client.
  • If the client gives you their tax number for a reverse-charge or similar arrangement, print it. The client field on Clearquire holds it.

Payment details that work abroad

A sort code and account number mean nothing to a client outside the UK. For international transfers:

  • IBAN and BIC/SWIFT for your account, printed exactly as your bank shows them.
  • Account name as the bank holds it.
  • Who pays the fees. International transfers often carry a fee at each end. Say on the invoice whether the amount is net of fees (the client covers them) or whether you accept the deduction.
  • Payment terms with a date, not "net 30". Time zones and bank holidays differ. A date does not.

Clearquire has fields for payment terms, payment instructions, and bank details. Put the IBAN and BIC in bank details, and the fee arrangement in payment terms or the notes.

Keep your own record straight

Your books are kept in your home currency. For each foreign-currency invoice, record:

  • The invoice amount and currency.
  • The amount that actually arrived in your account, in your currency, and the date.
  • The difference, which is an exchange gain or loss, however your accountant wants it treated.

The invoice number ties all three together, which is one more reason to number invoices carefully. See how to number invoices.

Checklist

  • Currency agreed in writing before the work, and named on the invoice.
  • Fixed amount in that currency, not a rate-dependent figure.
  • Currency set before any amounts are typed.
  • Figures rounded to that currency's minor units, line by line.
  • Tax position stated, with registration numbers if relevant.
  • IBAN, BIC, account name, and who pays transfer fees.
  • Due date as a date.
  • Received amount and date recorded against the invoice number.

Everything else that belongs on the page is in what to include on a freelance invoice.