Paying for overseas invoices

[J.McVeigh]

Morning All,

We have an invoice to pay from the Czech Republic. We have been asked if we want the invoice in pounds or Euros. In Czech Republic the currency is the Koruna.

My question is, what is the most cost efficient way to pay this invoice. Should we do it through our bank? In pounds? In Euros?

Thanks,

James

 

[Nochexman]

If you don't already have any loose koruna rolling around in your pocket, why wouldn't you pay in GBP?

 

[J.McVeigh]

If you don't already have any loose koruna rolling around in your pocket, why wouldn't you pay in GBP?

Would we not be subject to someone else's exchange rate that way? Is it more efficient to just do a straight transfer in GBP from our bank or is a third party specialist or broker a more economical way?

How do you normally do it?

 

[Mr D]

Would we not be subject to someone else's exchange rate that way? Is it more efficient to just do a straight transfer in GBP from our bank or is a third party specialist or broker a more economical way?

How do you normally do it?

You can look around and see who will do the best exchange rates.
Subject to the methods the company agrees you can use of course. Pointless trying to pay them by a method they don't have.

 

[Nochexman]

Would we not be subject to someone else's exchange rate that way? Is it more efficient to just do a straight transfer in GBP from our bank or is a third party specialist or broker a more economical way?

If you are invoiced in GBP and pay in GBP then you are not subject to any exchange rate.

If you think that you might be charged less if you chose to pay in koruna then that is a different matter. Is this something you have discussed with your supplier? Normally the actual price should be the same in whatever currency it is invoiced in. If it isn't then you should be asking why it isn't.

When it comes to pay the best way to do it is how you usually prefer to pay, unless your supplier has specified something else.

Unless you are doing a lot of these transactions it will be generally better value to pay this invoice yourself, rather than involving a third-party like a broker.

 

[J.McVeigh]

You can look around and see who will do the best exchange rates.
Subject to the methods the company agrees you can use of course. Pointless trying to pay them by a method they don't have.

I think I could have been clearer. Our quotes to date have been in Euros so we need to match that amount at the other end.

 

[Gecko001]

You need to be careful as if you get paid in GBP there is no incentive for the customer to get a good exchange rate from Koruna to GBP - or Euro to GBP.

Also, they will be juggling with three currencies if they pay in GBP: Euro, Koruna and GBP. Get paid in Euros and there are only two currencies in the equation as it is very likely they will have a Euro account.

 

[MOIC]

Paying in GBP is best for you to keep your cost price stable. However your supplier will undervalue the conversion, so they don't lose out when the currency fluctuates.

The fairest way is to agree a conversion rate (their bank rate) when payment is due and use that rate to convert to GBP.

If you decide to pay in a foreign currency, rates are normally better using a currency exchange house. They are easy to set up.

 

[J.McVeigh]

Paying in GBP is best for you to keep your cost price stable. However your supplier will undervalue the conversion, so they don't lose out when the currency fluctuates.

The fairest way is to agree a conversion rate (their bank rate) when payment is due and use that rate to convert to GBP.

If you decide to pay in a foreign currency, rates are normally better using a currency exchange house. They are easy to set up.

Can you recommend any exchange houses?

Thanks,

 

[Gavin @ Eooro]

We use currency exchange dot com for our fx payments.

Easier solution, if you have a paypal account and they do too, ask them to send a paypal electronic invoice...might cost you a few more £'s but much easier than going through the hassle of setting up an fx account.

Of course, it its a large amount then an fx account might be good to have for all future payments you might want to do.