Invoicing in Local Currrency

Scott,

Most ERP systems have multi-currency billng options in the system as designed. Absent that we would create a US Dollar invoice within Excel to send to the customer outside the ERP system but bill it in USD. We would then recognize the currency change at the time of the cash receipts. At month end if we had a significant currency swing we would make an adjustment to the sales and currency translation expense. I trust that these are the exception rather than normal transactions. With respect to selling in USD in other regions, that becomes a business question not strictly a financial one. How would selling only in USD affect your sales line and profitability? Is it significant? Can you mitigate the risk with the use of a currency forward hedge to sell currency at known exchange rates within a known fixed date or date range?

Scott, a problem I have had with this in the past, systems issues aside, is in getting local clients to pay in U.S. dollars when they are not set up to do so. Interestingly, with your statement above, it looks like you are ready and willing to let some (perhaps your bigger customers) pay in local currency. Well, those (the bigger companies) are also the customers for whom paying in foreign currencies is easiest. That's not to say that they'd want to, but they have the people, the systems and the banking relationships in place to pay in any currency anywhere. This is precisely what many smaller companies do not have. Trying to get anything other than a large company to do a foreign wire in a different currency is just not in their normal course of business.

Now that said, some folks will do anything for a discount. So to "inspire" action you might want to try something like paying for their cost of the transfer and/or the cost of the currency translation. Or simply give them a straight discount for paying in USD. But then tracking which of your customers is billed in which currency will become a headache unless your systems are set up to do that billing automatically. It becomes something of a processing chore.