Are you a Canadian business with customers in the United States? If so, you really need to consider billing your American clients in US dollars. Why, you ask? There’s two simple answers: make your US customers happy and make more money. It’s that simple. Why should I care? There are a handful of reasons why Canadian businesses should consider billing in US dollars. Here are some of the top reasons why: Easier reviews for your clients — and they’ll thank you for it Did you know that just by billing 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. That’s because 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. It’s a win-win for everyone! Give your customers what they already expect Imagine this: if you charge your US client $300 for a service that you provided, chances are, they’re going to review the invoice in their native currency. Why would they automatically assume that it’s $300 CAD instead of $300 US? You’re operating at a loss if you stick to Canadian currency, and your US clients may even get confused at first. Give them what they already expect, and your invoicing process will be much more seamless. Evade foreign currency fees One thing to consider is that some US banks actually charge a foreign currency fee. When you bill them in a currency that’s not in US dollars, chances are, they’re actually losing a bit of the profit that they otherwise would have pocketed. Nobody likes extra fees—not even your customers! Just the very fact that these fees exist (even if the cost is 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? Maximize your exchange rate On the flip side, 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. Read More: How To Take Advantage of the Lower Canadian Dollar as a Small Business Owner So, how do I get started? Before you actually go and open a USD bank account and start billing 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. 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 would you need the cash and what’s the current exchange rate? How does TrulySmall Accounting help with billing? 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. By using TrulySmall Accounting’s in-app payment processing feature, you can give your customers the opportunity to pay using their credit card directly from their electronic invoice. Start a Free Trial With TrulySmall Accounting If you’re not signed up for TrulySmall, 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 TrulySmall Accounting! No commitments, no hassle, no credit cards required, and you can cancel anytime. Get started today to make billing easier for you and to make your US customers happy.
