Which currency to invoice in

Who carries the exchange risk on each invoice currency?

When you pick a currency for the invoice, you're deciding who takes on both the exchange rate risk and the cost of converting the money. If you choose your own currency, the client needs to handle currency conversion on their end. If you choose your client's currency, you lock in the amount you'll get in their money, but then it's your job to convert it when those funds arrive, which means the rate could move before you actually do it.

Exchange risk just means the fact that currencies move around, sometimes fast, so the value you get could change before you convert or use the money. If you invoice in your own currency, you always see the exact number you'll receive, right from when you and your client sign the contract. But if the currencies change a lot, your client might end up paying more than they expected, and that sometimes slows them down. You can read a more detailed explanation in our guide to foreign exchange risk.

How invoice currency affects pricing and payment speed

Clients very often want to pay in their own currency. It makes their accounting more predictable and avoids extra conversion margins from their bank, which can sometimes be significant. If your price is already stated in the client's currency, they'll be comparing you with their local suppliers, so your price may appear sharper, but you'll need to watch your own margin as exchange rates shift between agreements.

The speed at which your payment arrives can also change. If the client has a bank account in the payment currency, they can usually send money as a domestic transfer, which tends to be faster and require less paperwork than an international bank transfer. You'll find practical steps for creating invoices in foreign currency in our separate article.

Deciding and protecting your currency choice in the contract

You should look at three things: what currency you pay your main expenses in, what currencies you have bank accounts for, and what your client expects from the agreement. If you typically pay suppliers from incoming revenue, keeping everything in your own currency limits any mismatch between what you take in and what you spend. But if you keep a balance in your client's currency, billing them in that money could make sense and avoid extra conversion steps for you.

Whatever option you pick, always write it clearly into the contract terms and the pricing or rate sheet. If you want to avoid carrying all the risk yourself, it is possible to include a currency clause which spells out how the price adjusts if exchange rates swing. We've explained common ways to do this in our article on currency clauses in international contracts.

Frequently asked questions