- Invoice currency and contents
Invoice currency and contents
Currency exchange rates go up and down. Setting a price in a foreign currency could see the value of your invoice rise or fall depending on the exchange rate on the day it is paid.
If you haven’t fixed your exchange rate, you haven’t fixed your price.
Invoice in pounds
You can pass the risk of currency fluctuation on to the buyer by invoicing in pounds. The buyer may not want to take on the risk making you less competitive than someone invoicing in the buyer’s local currency.
The buyer may be happy to pay in pounds. The currency you invoice in should be part of your negotiations with the buyer.
Invoice in a foreign currency
Invoicing in the buyer’s currency could make you more competitive but you will be exposed to the risk of currency fluctuation.
You can reduce this risk by:
- setting the exchange rate on the day of payment
- charging extra to cover any losses
- hedging the currency at a fixed rate with a forward exchange contract
- getting paid into a foreign currency account
You should also account for the cost of exchanging currency in your pricing.
Think about your exchange strategy and consider getting financial advice on exchange rates (sometimes called FX).
What to put on an export invoice
If you ship goods overseas, a commercial invoice must be included with the shipment. Commercial invoices contain more information than a normal invoice including the:
- full name, address and contact details of the seller and buyer
- number and date of issue of the commercial invoice
- number and date of issue of the proforma invoice, purchase order or sales contract
- price, method of payment, currency and any discounts or additional charges
- quantity, gross and net weight of goods and number, weight and type of packages
- harmonised system (HS) tariff code and a plain English description of the products
- incoterms including delivery and payment
- country of origin of the goods
- means of transport and route
- actual value of the goods
Some countries require invoices to be certified by a Chamber of Commerce or embassy. Your local Chamber of Commerce should be able to tell you the requirements of your target market.