Answer these questions before you send an international invoice

Amy Hardison White Avatar
Amy Hardison White

With all the online tools available to us today, invoicing is a fairly straightforward process. The hard part is determining what to sell and what you’ll charge. After that, deciding on payment terms and setting up invoicing workflows happen pretty quickly.

But there’s one thing you might not think about: if you’re only invoicing domestically, you already know how business works by virtue of where you live. Accepted payment methods, standard payment terms, and approximate tax rates are all familiar to you.

All that knowledge goes out the window the first time you invoice an international customer.

Think about it: if you’ve ever taken a trip outside your home country, what did you do to prepare? You probably got a small amount of the local currency from a bank. Maybe you did a little reading on the local language, cultural norms, and cuisine. You might even have bought some special clothes for your trip.

In order to make sure you don’t violate any laws or pay unnecessary fees, you’ll need to take similar measures before sending your first international invoice. Here are a few of the most important questions to ask:

What are the business practices where you plan to send invoices?

Before dipping your toe into international waters, make sure you learn a little about how businesses operate.

  • Are there any country- or region-specific taxes that apply to sales?
  • Are there any steps you need to go through to do business in the new country - like registering with the government, or filling out forms?
  • What type of contract language and clauses can you expect, if you’re dealing with contracts?
  • Are there any business practices native to your home country that are frowned upon in the new country?

Make sure you fully investigate business practices before it’s time to hit “send” on that invoice. Having this information will help you and your prospective customers start the relationship right.

Related: A quick guide to business etiquette around the world

How will you handle international transactions?

Once you have a better understanding of the business climate, it’s time to think about all the inputs related to payment. Some of these questions may be answered by your previous research; however, it’s still a good idea to focus on them specifically.

Do you want to accept payments in the local currency or your home currency? If you accept payments in the local currency, remember that exchange rates can swing widely even in short spans of time. And be sure that your invoicing platform offers the local currency, so customers don’t have to take the time to calculate the exchange rate on their own.

What kind of payment schedule do you want to enforce? Agreeing to a payment schedule upfront allows you to plan out payments, with the goal of choosing times that don’t impact the exchange rate significantly (if possible).

What payment methods will you accept? Make sure to research international payment methods that work for you and your customers. Know the fees upfront so you can make informed decisions.

Though they still have higher fees, wire transfers are popular with international payments. They generally incur just a flat fee, rather than the percentage-based fees charged by services like PayPal and other payment gateways. And if you do enough business in-country, consider setting up an international bank account to avoid fees.

Related: Should you add wire transfers to your list of payment options?

All these inputs on international business practices, payment methods, and payment terms will help inform the invoicing processes you create for international customers. And if something new crops up, you can always go back and make changes.

Want to know how Invoiced supports robust international invoicing? Contact us for a demo to learn more.

Amy Hardison White Avatar
Amy Hardison White

Get our A/R tips and tricks delivered

From us to your inbox weekly.