Here is how can you receive payment from international clients. For your company or organisation, expanding internationally can be an exciting time, but it can also bring along a number of new difficulties with the timely billing and payment of your overseas clientele. Here are a few things to take into account when billing your overseas clients or consumers. You can receive payment from international clients easily by following ways.
Decide on your purchase conditions
First, while creating a contract with a foreign client, be sure to make the conditions of the sale clear to the client. Cost, quantity, delivery, payment method, accepted currencies, and the anticipated or due date for payment are a few examples. Setting up clear expectations for these matters will assist your company in managing cash flow and reducing risk.
Select your global payment options.
Next, consider the many payment options you might provide your overseas clients with:
Payment method 1:
Wire transfer / bank account
Wire transfer or bank account is the first payment method.
International clients frequently use wire transfers to pay a company. With this option, you also send the invoice to the payers together with your company’s financial information (routing number, Swift code, IBAN, etc.). This makes it possible for your overseas client to enter the required data into a wire transfer. However, this approach has a few significant flaws.
Most notably, short payments can happen when money is taken out of payments before it gets to you due to intermediate costs and hidden FX rates. The fees are concealed in the deal and frequently incorporated into a marked-up exchange rate. But because your buyer won’t have taken these into account, they can result in short payments.
The labour involved in reconciling a payment to an invoice is another disadvantage of wire transfers. Due to this, businesses are unable to determine which of their foreign clients have settled their account balances and which ones have not.
Payment method 2:
Opening an account with a foreign bank
You might think about creating a foreign bank account if the majority of your overseas payments come from one nation. By using this strategy, numerous wire transfer fees can be avoided. Additionally, it provides clients with a domestic choice for paying their invoice that they are already accustomed to. However, you must weigh how much money you will receive into these international bank accounts against the time it will take to set up and manage them. Additionally, you’ll eventually need to transfer this money back to a bank account in the nation where your company is located.
Payment method 3:
Allowing credit card transactions
If you plan to accept credit cards as a form of payment for your invoices, be aware that in addition to the cross-border merchant discount costs your company will be charged, your customers may pay a foreign exchange spread of up to 5% of the overall transaction cost. Customers may appreciate how simple it is to pay with a credit card by entering it on a website or payment service, but because the fees are related to the invoice size, it may hurt your business if customers can discover cheaper choices elsewhere.
Payment method 4:
Taking payments from outside parties
Another option is to use a global payment processor like Flywire. With the help of our solution, your company may accept payments, take care of reconciliation and back-end accounting tasks, do away with inbound wire fees, and take advantage of favourable exchange rates. Flywire also streamlines the payment procedure for customers while providing them with a variety of local payment options.
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