This article explains why you should always request a dual invoice with global vendors.
It’s a traditional approach to pay foreign suppliers in USD. Maybe you’ve always done it this way, and to your knowledge, it works out just fine.
Re-evaluating your payment methods could really pay off. If you’re paying global vendors in U.S. dollars, you are most likely paying too much for imports.
There are several reasons why the base USD value starts out inflated, one of them being that your global vendor makes the calculation using their banks’ poor foreign exchange (FX) rate.
Another reason is, since your vendor will be paid in the future, they are unaware of what the FX rate will be. This causes them to ‘pad’ the dollar amount to manage the risk.
A weakening dollar will result in your U.S. dollar invoice value increasing each month. Having an unmanageable FX risk can be stressful. That is why GreenShootsFX highly recommends you request a dual invoice.
A dual invoice will provide you with quotes and invoices in two currencies: one in U.S. dollars and the other currency specific to the buyer.
Paying in your supplier’s currency will lower the dollar amount. By calling us, we will provide you with rates that will beat your bank. Using forward FX rates will mitigate the risk and still allow you to accurately forecast your cash flow.
If you want to reduce your invoice value by 4-7%, call us today. We’ll give you better rates and the service you deserve.