I generally invoice in Euros, and then accept international wire transfers fees that get deducted in transit. If the customer asks me to quote/invoice in their preferred currency that's fine. In this case, I pick the conversion rate that my bank provides me and add any conversion fees (not transfer fees) to the amount on the invoice.

Sometimes a customer just pays in a different currency without notifying me beforehand. They usually just enter "x EUR in [other currency]" into google and wire that amount. Obviously, this is not the conversion rate that the customer nor I would ever get from our banks. So now this payment, which is 10% below the net of the invoiced amount, appeared in our bank account.

How should I professionally handle the situation? I can see a few options:

  1. Accept the hit and just go on with life, as long as it doesn't occur too often. This makes it somewhat unfair to the customers who do the conversion on their side and pay in the correct currency, or at least ask beforehand to change the currency on the invoice.
  2. Have my bank reject the payment, probably incurring even more loss as the money travels the way back to the other side of the world. Then tell the customer that I can't accept his currency and he shall pay as invoiced. Sounds like a bad move in terms of customer friendlyness – of course I could pretend my bank did it automatically.
  3. Keep the amount but tell the customer he should make another payment of the 10%+new conversion fees. How would I go on about doing that? Issue another invoice? After all, the total amount paid by the customer will be higher than if he had paid in one batch in the first place.

I'd appreciate some wisdom on how this is commonly handled.

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    What does your contract/agreement say? I know that I always checked/mentioned this before any work when I had to deal with different currencies. Don't you? – OldPadawan Mar 27 '19 at 16:15
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    International wire transfers have a provision for the sender to pay all conversion fees and deposit an exact amount on the receiver's account. If the sender chooses not to use this option, they should be aware that the receiver will get less. So that's an error your customer made. – Simon Richter Mar 27 '19 at 16:29
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    I'm voting to close this question as off-topic because it's a question about doing business rather than handling workplace problems. – Blrfl Mar 27 '19 at 16:55
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    @Blrfl Oh, sorry I checked which other stackexchanges could fit better, but the startup one doesn't exist anymore, and personal finance is even more off-topic. I had hoped It could fly under "professionalism within the Workplace". Let me know if you have a better stackexchange site in mind. – InternationalBusinessIsGreat Mar 27 '19 at 17:05
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    try freelancing.stackexchange.com/help/on-topic – mcknz Mar 27 '19 at 18:52

Living in the UK, I can tell my bank to put €10,000 into your account, and you will receive €10,000, or I can put U.K.£ X into your account, and you get whatever the bank gives you.

If I calculate the exchange rate, there are usually different rates for £ to € and for € to £. So your customer probably picked what was better for them.

The customer hasn’t paid your bill. You do exactly what you would do if they had sent you €9,000 in banknotes: you tell them that they didn’t pay the complete bill and ask for the difference to be paid.

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    I'd add to get a lawyer to draft your contracts so you always can follow that answer's advice. And also very fitting as so often: youtube.com/watch?v=jVkLVRt6c1U – Frank Hopkins Mar 27 '19 at 16:27
  • Thank you, your answer and the video suggested by @FrankHopkins motivated me to not let it slide. – InternationalBusinessIsGreat Mar 27 '19 at 17:14
  • Actually a lot cash in hand bushiness that have to deal with this, like shops near a border have a policy of allowing foreign currency but giving them a bad conversion rate. Some customer may privately complain about the rate and convert it elsewhere but those are the same people that would try to fob off foreign currency without paying the fees, like the customer is doing here. – user10399 Mar 28 '19 at 13:40

Can you add a standard line to your invoice with the amount due in the client's local currency? As in:

Pay one:

Amount due (Currency X) X______

Amount due (Currency Y) Y______

It means doing conversions on all your invoices instead of on demand, but it has the advantage of letting the client know what is expected if they choose to pay in local currency.

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    Make sure you factor in fees, and the factor in that the exchange rate can fluctuate, and when you do the conversion, the price can be different. – Gregory Currie Mar 28 '19 at 2:01
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    @GregoryCurrie it would still be better than getting shorted an almost guaranteed 10%. – stannius Mar 28 '19 at 15:51

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