How do you handle invoices from different countries and currencies?

1 Understand the legal requirements

Before you process any invoice from a foreign country, you need to understand the legal requirements and regulations that apply to your business and the supplier's country. For example, you may need to check the VAT or GST rates, the withholding tax rules, the invoice format and content, the data protection laws, and the anti-fraud measures. You also need to comply with the local accounting standards and reporting obligations, such as GAAP or IFRS. By doing so, you can avoid penalties, fines, audits, or disputes that may arise from non-compliance.

2 Choose the right currency and exchange rate

Another important aspect of handling invoices from different countries and currencies is choosing the right currency and exchange rate for the transaction. Depending on your contract or agreement with the supplier, you may have the option to pay in your local currency, the supplier's currency, or a third-party currency. You should consider the benefits and drawbacks of each option, such as the transaction costs, the currency risks, the cash flow impact, and the supplier's preference. You should also use a reliable source for the exchange rate, such as the official bank rate, the market rate, or a fixed rate agreed upon in advance.

4 Communicate clearly and regularly with your suppliers

One of the key factors for a successful invoice verification process is effective communication with your suppliers. You should communicate clearly and regularly with your suppliers about your invoice requirements, expectations, policies, and procedures. You should also inform them about any changes, issues, or queries that may affect the invoice processing or payment. You should also solicit feedback and suggestions from your suppliers on how to improve your invoice verification process. By communicating clearly and regularly with your suppliers, you can build trust, rapport, and collaboration, as well as prevent misunderstandings, disputes, or conflicts.

5 Review and monitor your invoice performance

Finally, you should review and monitor your invoice performance regularly to identify any problems, opportunities, or trends that may affect your invoice verification process. You should use metrics and indicators that measure the quality, efficiency, and effectiveness of your invoice verification process, such as the invoice accuracy rate, the invoice cycle time, the invoice exception rate, the invoice payment rate, and the invoice cost per invoice. You should also use reports and dashboards that provide insights and analysis on your invoice performance, such as the invoice volume, value, distribution, status, and aging. By reviewing and monitoring your invoice performance, you can evaluate your strengths and weaknesses, as well as make informed decisions and improvements.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?