If you are providing services to a customer based overseas, we can provide you with the support you need and additional invoicing features to make light work of exchange rates.
If you have a client based overseas, inniAccounts will provide the extra support you need with your invoicing, taxes and accounts. Your invoicing and bookkeeping features will be extended to assist and handle any exchange rate conversions.
Managing and invoicing overseas clients with inniAccounts is very similar to the process of working with UK-based clients. In summary, you should:
- Capture client’s details by creating a new contact / client. Here you select your client’s currency and the country they’re located in
- Record billable time, mileage and expenses as normal (in £ sterling)
- Create invoices using your chosen currency and supply country
- Receive payment for invoices and record the amount into your business bank account. inniAccounts will automatically account for any exchange rate differences
Behind the scenes your online software will account for exchange rate gains and losses as well as ensure your VAT return is completed correctly.
Creating a contract for an overseas customer
Just as invoicing clients based in the UK is made easy by setting up a contract, you will do the same for your clients based overseas but with some additional information.
When you create a contract for a client outside the UK you will need to include:
- Currency – the currency you will invoice your services in
- Supply country – the country where your client is based
- Default rate – in the currency you have set for the contract
- VAT registration number of your client – in the Invoice name and address box
- Your bank details – in international format
You can read more about the additional information and an important check on your clients VAT registration in this article.
Tracking time, expenses and mileage
You can track billable time, expenses and mileage for overseas clients in the same way you do for UK-based clients. (Read more here)
When entering expenses into inniAccounts you should record the amount in pounds. When you add billable expenses to your invoice they will be converted into the client’s currency.
Creating an invoice
When you create an overseas invoice in inniAccounts you are prompted to select both the currency and the country of supply. If you are creating an invoice for a pre-defined client/contract (see above), the currency and country will default to the options you selected when setting up the client/contract.
Select the currency you wish to invoice your client in – for example, Euros or US Dollars.
Customer location / Country of supply
For invoicing purposes the country of supply is the country into which you will be supplying services. For example, if you are invoicing a client who is based in France the country of supply will be France, regardless of where you are based when providing the service. The country of supply is used by the software when creating your VAT return.
Adding time, expenses and mileage
You can add time, expenses and mileage to your invoice in the same manner you would for UK-based clients. Billable mileage and time will be added to your invoice using the rates specified in your contract settings. When adding a billable expense the value is converted to the invoice currency using the appropriate exchange rate. If required you can edit the invoice line and change the recharge value of expenses to match the amount (in the local currency) shown on your expense receipts.
Once you’ve saved your invoice inniAccounts will convert the invoice amount into pounds using the exchange rate on the invoice date. This value will appear in your homepage, in bookkeeping as a pending payment in LiveCash. The exchange rate is shown when you view the invoice.
Receiving payment for an invoice
Once your client pays the invoice you’ll need to confirm exactly how much money you’ve received. The actual amount you’ll receive into your bank account in pounds will vary due to exchange rate fluctuations and bank fees. inniAccounts makes it straight forward to account for these variations.
Fully paid invoices
If the invoice has been paid in full by your client, simple leave the ‘fully paid’ checkbox checked. In the ‘amount (£)’ box, enter the actual amount received into your bank account in pounds – this will most likely be different to the default value shown in the box. This amount should match the figure shown on your business bank account.
Partially paid invoices
If, on the other hand, the invoice has been partially paid you’ll need to record both how much of the invoice has been paid in the foreign currency and the amount received in pounds. Consider the following example: you have raised an invoice for €2,362.24 and the client has paid €1,000 of the invoice balance. After looking at your bank statement you can see that £852.72 has been received into your business bank account. In this instance, confirm the pending payment and enter £852.72 into the ‘amount (£)’ box. Uncheck the ‘fully paid’ checkbox, enter €1,000 into the ‘amount (€)’ box and save the transaction.
Once you receive the balance of the invoice, simply confirm the remaining pending payment. Once again enter the amount shown on your business bank account, check the ‘fully paid’ checkbox and save the transaction.
EC Sales List
If you’re VAT-registered in the UK and supply services to VAT-registered customers in another EU country, you’ll need to tell HMRC about those supplies using a EC Sales List.