If you’re taking on customers in different countries, you’ll need to be able to accept payments in foreign currencies. There are a few ways in which you can do this – depending on whether you want to hold cash in multiple currencies or automatically convert all payments – as this guide explains.
Determine how to display pricing
When selling products and services to customers in other countries, you can choose to either display pricing in your own currency or convert pricing into foreign currencies.
Some companies decide to make separate websites for customers in other countries. Not only are these websites translated into a different language, but they can display pricing in the currency of that country. This allows you to adapt the pricing based on the local market.
Alternatively, there are tools that can automatically convert pricing on your website for visitors depending on what country they are visiting from. This ensures that the currency conversion is always accurate, but may lead to unusually specific pricing.
Open a multi-currency account
Regular bank accounts can only hold one currency. With a multi-currency account, you can accept, hold and spend money in a range of currencies.
This could allow you to hold currencies without having to pay a currency exchange fee and spend these currencies on foreign products or services (such as using Australian dollars to pay an Australian marketing company to promote your business to your Australian customers)
Look for a corporate bank account that can accept the currencies that you are most likely to deal with. Fees and charges on these accounts can vary, so spend time comparing accounts. In some cases, it may be worth opening up accounts with foreign banks.
Use the right payment gateway
Many of the world’s most popular payment gateways are able to accept a range of currencies. Many of these are able to automatically convert currency and charge you the exchange fee before depositing the payment in your account.
Some payment gateways accept a greater range of currencies than others. If you’re likely to be accepting more obscure currencies, consider looking for specialist payment gateways that accept this currency.
Make sure to also compare the fees of different payment gateways. Some charge monthly flat fees, while others charge a percentage-based fee on each transaction. There will usually be separate fees for converting currency. By taking the time to explore your options, you can decide which fee structure is best for your business.
Work with a suitable accountant
If you’re accepting, holding and spending different currencies, it could potentially complicate bookkeeping. You’ll likely need to hire an accountant who has experience in multi-currency accounting.
Depending on how much income you are making from foreign customers, you may have to pay separate tax on this income, however it also depends on where you are holding this currency and whether you are automatically converting it to your own currency. A specialist accountant can help you navigate this and may be able to advise tips to prevent double-taxation.
