5 simple ways to pay your vendors is the topic in our Ask Customer Support Webinar Series for the month of January. Join our Customer Support team as they focus on answering the questions you've been asking. Register here!
Within Bill.com, small business customers can send payments to their overseas vendors in the local currency of the vendor. Bill.com provides the exchange rate upfront and provides the full amount that the vendor will receive in their currency.
To enable the ability to enter bills in a foreign currency, contact Customer Support.
- Note: If syncing to an accounting software, Multi-Currency must be enabled in the accounting software or the sync will stop working
Below are a few benefits of paying in local currency vs U.S. dollars:
We can convert funds for you and payments will arrive faster to foreign vendors.
When paying a foreign vendor in U.S. dollars, funds need to be converted, and that usually occurs at the foreign vendor’s bank. With another institution converting the funds it can involve delays and take longer to land in the vendor’s bank account.
There may also be “hidden fees.” When the payment is sent to the vendor’s bank, the bank converts the funds to the local currency and sometimes there’s an extra conversion charge tacked on.
Currency exchange rates
Managing currency exchange rates versus the U.S. dollar can be tricky. When paying in U.S. dollars, the value of the payment between when a payment is approved and when it lands in the vendor’s bank account can be different due to the ever-fluctuating value of currencies versus the dollar. To guard against currency value swings, international vendors sometimes “pad” quotes in their favor to help guarantee that they receive the value they believe they are owed. If paying in the vendor's local currency, the vendor can be ensured that they are paid exactly the amount they desire for services or products delivered.
As careful as employees may be, mistakes can inevitably happen. Correcting errors in cross-border payments isn’t just complicated and time-consuming, it can also end up costing more money. By paying foreign vendors in their local currency, the need to convert currencies is eliminated from the equation. In these cases, unfortunate payment errors won’t be as costly.
International vendors will have an easier time reconciling payments, reducing questions and concerns that need to be fielded. For example, it is much easier for them to match up a €100 to an exact €100 payment versus $116.35, which is the exchange rate at the moment this article was published.
In many instances, making international business payments in a vendor’s local currency can lead to cost savings in the long run. It’s worth it to take a closer look at your international payment processes to see if there’s any cost cutting potential and reducing unnecessary delays or complexity.