Are you a Canadian Business with customers in the United States? You really need to consider invoicing your American clients in US dollars. Why, you ask? Two simple answers: Make your US customers happy and make more money. It’s that simple.
Why Should I Care?
Did you know, just by invoicing in USD, you’re doing your American customers a favour? It’s actually easier for your customers to see the outstanding amount in their own currency when they open your invoices. They can see exactly what they owe at-a-glance. They don't have to think about exchange rates, go through the hassle of digging up their calculators, and actually doing the conversion. Plus, some US banks actually charge a "foreign currency" fee. Nobody likes extra fees! Just the very fact that these fees exist (even if the cost is actually minimal) leave some customers with a bad taste in their mouth after paying. Wouldn’t it be great if you and your customers could avoid all of that?
On the flipside, when you get paid in USD, you get the benefit of enjoying a strong US dollar. You can watch the market, and do the exchange when it makes the most sense for you. If you work it just right, you can actually make money, just by being smart with your revenue.
Now, think about this: If you’re receiving USD and waiting for the best exchange rate, that means you’ll have US funds on hand to pay any US vendors or suppliers you might be using. You’ll then be saving multiple exchange fees because you’re not exchanging from USD to CAD, and then back to USD just to pay those suppliers. Lower fees on transactions = a better bottom line.
So, How Do I Get Started?
Before you actually go and open a USD bank account and start invoicing in USD, here are a few things you might want to consider so that you can make the best decision for your business.
1. How much does my business actually process in USD?
If it’s not very much, you can save a load of cash by having somebody else handle the conversion for you. Plus, keeping your accounts in CAD keeps things simple for your growing business. This is a great option because you can ensure that your customers can pay in their local currency while at the same time, you save yourself the headache and cost of dealing with multiple accounts.
If, however, you're processing a significant amount of transactions in USD, it might be best to consider getting accounts that process USD directly. By keeping the funds in USD, you can control when the exchange happens. Then you’ll be the master of your domain, and can even make a little extra revenue as a bonus.
2. How do your customers want to pay your invoices?
If the majority of your customers in the US are paying by credit card, it probably makes sense to use a merchant service provider that offers “direct processing” in USD. You can then have the power to choose whether or not you want the provider to convert to CAD for you or to deposit the funds directly to your USD bank account. Keeping it in USD, however, will avoid multiple conversion fees.
If, on the other hand, your US customers love to pay with cash or a cheque, you should seriously consider getting a USD bank account. It will save you a huge headache and more than a few stressful moments.
3. How do I get my money converted back to CAD?
In this market, you should use a provider that is competitive and is working for you. They should be offering great rates, willing to be flexible according to your needs, and should have options that allow your transactions to be entirely electronic. The good news is, you have some great options outside of the big banks. Check around where you live for currency exchange specialists that offer competitive rates to businesses.
Once you have your provider in place, you can then pick the time that's right for you to convert back to CAD (think: when you need the cash and what’s the current exchange rate?).
How Does Kashoo Help?
When you sign in to our web app you can specify the currency for a given invoice you are planning to send to your US client. You have the power to choose whatever’s best for the client and circumstance. You can then save time by universally setting the currency you want to use for your US-based customers instead of on a case-by-case basis.
By using Kashoo’s in-app payment processing feature, in partnership with BluePay, you can give your customers the opportunity to pay using their credit card directly from their electronic invoice.
As an added bonus, when you go through the sign up process for a merchant account with BluePay, you can get one account in CAD and one in USD. That way, Kashoo actually handles the complexity of exchange rates for you so you can always see your up-to-date financial records in Canadian dollars, while at the same time having access to the transaction records in the original currency too.
Start a Free Trial With Kashoo
If you're not signed up for Kashoo, but you want to try out the awesome benefits of what we've been talking about, you can START A FREE 14-DAY TRIAL with Kashoo; no commitments, no hassle, no credit cards required, and you can cancel anytime. Get started today and make your US customers happy.