Decide which currency to bill in
When you work with a client in another country, the first question is whose currency the invoice should use. Billing in your own currency puts the exchange risk on the client: you always receive exactly the amount you quoted, and they deal with conversion. Billing in the client's currency is often more attractive to them, makes you easier to approve, and can help you win work in markets like the US or UK where clients expect to pay in dollars or pounds. The cost is that you carry the risk of the rate moving between invoice and payment. There is no single right answer. A common approach is to quote in your own currency by default and agree to bill in the client's currency when it helps close the deal, with a price that allows a small margin for movement.
What a foreign currency invoice must show
A foreign currency invoice needs everything a normal invoice does: your details, the client's details, a unique invoice number, the date, line items, payment terms and the total. On top of that, make the currency unmistakable. Use the three-letter currency code, such as USD, GBP or EUR, next to every amount, not just a symbol, because the dollar sign alone is used by several countries. State clearly how the client should pay, including bank details suited to international transfers or a link to pay online. If VAT or sales tax applies, check your local rules carefully: some countries require the tax amount to be shown in your national currency as well, even when the invoice total is in a foreign currency. Our guide to creating a professional invoice covers the standard fields.
Which exchange rate to use
Your books and tax returns are kept in your home currency, so every foreign currency invoice has to be converted at some point. The usual approach is to convert at the exchange rate on the invoice date, using a consistent and reputable source, such as your central bank's published reference rate or the rate your tax authority accepts. Some tax authorities publish their own monthly or annual rates, and some require a particular source. Whichever you use, use it consistently and keep a note of which rate applied to each invoice. Do not pick a different source each time to get a better number. Consistency matters far more than finding the perfect rate, because it lets your accountant or a tax inspector follow exactly how you arrived at every figure.
Exchange gains and losses, with an example
Because rates move between the day you invoice and the day you get paid, the amount that actually lands in your account will rarely match the converted invoice exactly. Say you are based in the euro area and invoice a US client $3,000 on 1 March, when one dollar is worth €0.92. Your books record income of €2,760. The client pays on 31 March, when one dollar is worth €0.90, so the $3,000 converts to €2,700. The €60 difference is an exchange loss. If the dollar had risen instead, you would have an exchange gain. On accrual basis these differences are usually recorded separately from your sales. On cash basis, you often simply record what you received. How gains and losses are treated for tax varies, so check with your accountant.
Fees: who pays them
International payments come with costs: bank transfer fees, intermediary bank charges, card processing fees and the spread hidden in the exchange rate itself. Left unaddressed, they come out of your side. A $3,000 invoice can easily arrive as $2,960 after fees, and then lose a little more when converted. Decide upfront who pays, and say it on the invoice. Many freelancers add a line to their payment terms asking the client to cover all transfer fees, or offer payment options that keep fees low, such as a local bank account in the client's currency through a multi-currency provider. When a client pays short because of fees, record the payment at the amount actually received and the difference as a bank fee, so your books still reconcile with your bank statement.
Record everything in your home currency
Even if half your clients pay in dollars, your profit and loss, VAT return and tax return are almost always prepared in your home currency. Every foreign invoice and payment needs a home currency value recorded alongside the original amount. Doing this by hand for each invoice is where mistakes creep in, especially with partial payments. Keep the original amount, the currency, the rate used and the converted amount together on each record. If you hold a foreign currency bank account, reconcile it in its own currency, then convert balances for reporting in the way your accountant recommends. When you pay expenses in foreign currencies, such as US software subscriptions, treat them the same way: record the amount actually charged to your account in your home currency.
Protect yourself against currency swings
You cannot control exchange rates, but you can limit how much they affect you. Short payment terms help: the less time between invoice and payment, the less the rate can move, so net 14 is safer than net 60 for a foreign client. Building a small buffer into your price, a few percent, absorbs ordinary movement without you having to renegotiate. For long projects, ask for a deposit upfront in the client's currency, so part of the fee is fixed before any movement happens; our guide on asking for a deposit covers how. For ongoing clients, agree to review the rate or currency every six or twelve months. If a large share of your income is in one foreign currency, talk to your bank about options for holding or converting it.
VAT and international clients
VAT rules for international work are their own topic, and they depend on where you and your client are based and whether the client is a business or a consumer. As a general pattern, services to business clients in another country are often outside your local VAT or covered by a reverse charge mechanism, where the client accounts for the VAT instead of you. Services to private individuals abroad may follow different rules. The invoice may need specific wording, such as a reverse charge note and the client's VAT number. If you are in the EU, our guide to VAT for freelancers in the EU explains the main cases. Rules differ by country, so check with your tax office or accountant before sending your first cross-border invoice.
Invoice in any currency, report in yours
Kelvo Books handles multi-currency invoicing with exchange rates built in. Create an invoice in USD, GBP, SEK or any other currency, and the amount is converted to your home currency for your profit and loss, cash flow, ledger and tax summary. Clients see a clean invoice in their own currency on a public invoice page, and automatic reminders on Pro follow up if a payment is late. Expenses paid in foreign currencies are recorded the same way, and a CSV or ledger export gives your accountant both the original and converted figures. The free plan includes 10 invoices a month, unlimited clients and expenses, and the P&L. Pro at €7 a month adds unlimited invoices, reminders and recurring billing. Start at books.kelvo.app.