Invoicing in foreign currencies: how to manage multi-currency
Introduction
Do you work with clients in Europe, the United States or elsewhere in the world? The question quickly arises: should you invoice in Swiss francs or in your client's currency? Invoicing in foreign currencies can facilitate your business relationships and make your prices more attractive, but it introduces additional complexity into your management.
Exchange rates fluctuate daily. An invoice for 10,000 euros issued today will not be worth the same amount in Swiss francs in 30 days. This variation can impact your margin, create exchange differences in your accounting, and complicate your VAT return if applicable.
This practical guide explains how to manage invoicing in foreign currencies rigorously. You will discover how to choose the appropriate currency, which mandatory information to include on your invoices, how to correctly convert amounts for your Swiss accounting, and above all how to anticipate and reduce exchange rate risk. Whether you are a freelancer working occasionally with foreign clients or a regular exporting SME, you will find practical answers to secure your international transactions.
📌 Summary (TL;DR)
Invoicing in foreign currencies requires choosing the appropriate currency, indicating mandatory information and managing conversions for your Swiss accounting. Exchange rate fluctuations create a financial risk that must be anticipated through short payment terms, contractual clauses or currency accounts. Rigorous documentation and suitable tools allow you to track exchange differences and remain compliant.
📚 Table of contents
Why invoice in foreign currencies?
As soon as you work with foreign clients, the question of currency arises. Invoicing in euros, dollars or other currencies facilitates payment for your international clients and strengthens your competitiveness.
This practice becomes common for Swiss companies that export, freelancers working with European agencies, or startups with an international clientele. The client pays in their currency, you develop your market.
But invoicing in foreign currencies also involves new obligations: accounting conversion into CHF, exchange rate management, and rigorous documentation for tax purposes.
The basics of invoicing in foreign currencies
Before creating your first invoice in euros or dollars, you need to understand the practical rules and legal obligations that govern currency invoicing in Switzerland.
Choosing the invoicing currency
The choice of currency depends on your client and your market. For Europe, the euro (EUR) is standard. American clients prefer the dollar (USD). British markets use the pound sterling (GBP).
This currency can be negotiated contractually from the start of the collaboration. You can also invoice in CHF and let your client manage the conversion on their side.
The important thing is to clearly define the currency before issuing the invoice to avoid any misunderstanding about the amount due.
Mandatory information on the invoice
An invoice in foreign currency must clearly indicate the currency used (EUR, USD, GBP) next to all amounts. If you apply a conversion to CHF, specify the exchange rate used and its date.
Swiss legal requirements remain mandatory: invoice number, date, identification of the issuer and client, description of services, payment terms.
For foreign clients, consult our guide on VAT on exports to know the specific information to add.
VAT and international invoicing
In principle, the export of goods outside Switzerland is exempt from Swiss VAT. For services, the rules vary according to the actual place of supply and the client's status.
The invoicing currency does not affect VAT rules: what matters is the place of delivery and the nature of the service. An invoice in euros to a German client follows the same rules as an invoice in CHF.
For complete details on exemption conditions and required documentation, refer to our article on how to invoice foreign clients.
How to manage exchange rates
The exchange rate is at the heart of multi-currency accounting. It determines the real value of your invoices in Swiss francs and directly influences your accounting result.
Which exchange rate to use?
You have several options: use the rate on the invoicing date, a monthly average rate, or a fixed rate defined contractually with your client.
For tax purposes, the Federal Tax Administration and the Swiss National Bank (SNB) publish recognised official rates. The rate on the invoicing date is generally the simplest and most accepted reference.
Whatever your method, systematically document the rate used on each invoice and keep supporting documents (screenshot of the SNB website for example).
Conversion for Swiss accounting
Swiss accounting must be kept in Swiss francs. All your invoices in foreign currencies must therefore be converted into CHF for accounting records.
This conversion is generally done at the rate on the invoicing date, or at the average rate for the period according to your accounting method. The important thing is to be consistent in your approach.
This conversion creates an initial amount in CHF. But beware: the amount actually received upon payment may differ if the rate has changed in the meantime.
Exchange differences: gains and losses
The exchange difference corresponds to the gap between the rate at invoicing and the rate at collection. It is a gain if the franc has depreciated, a loss if it has appreciated.
Concrete example: you invoice 1,000 EUR at a rate of 1.05 (= 1,050 CHF). Upon payment 30 days later, the rate is 1.03 (= 1,030 CHF). You record an exchange loss of 20 CHF.
These exchange differences are taxable (gains) or tax-deductible (losses). They must be recorded separately in your income statement.
Exchange rate risk: understanding and anticipating
Invoicing in foreign currencies exposes your business to exchange rate risk. Understanding this risk is the first step to managing it effectively.
What is exchange rate risk?
Exchange rate risk is the possibility that the currency depreciates between the time you issue the invoice and when you receive payment. This depreciation reduces the actual amount you collect in Swiss francs.
The longer the payment term (30, 60, 90 days), the greater the risk. Currencies have time to fluctuate significantly, especially during periods of economic instability.
Example: an invoice for 10,000 EUR can lose 200 to 300 CHF in value in a few weeks if the euro falls, directly reducing your margin.
Assessing your exposure
Analyse three key factors: the volume of your invoices in foreign currencies (as % of your turnover), your average payment terms, and the volatility of the currencies you use.
If you invoice 50% of your turnover in euros with 60-day terms, your exposure is significant. Conversely, a few occasional invoices in USD represent limited risk.
The higher these three factors, the more you need to implement active protection strategies to secure your cash flow.
Strategies to manage exchange rate risk
Several practical approaches can limit your exposure to currency fluctuations. Choose the one that corresponds to your volume of international activity.
Reducing payment terms
Short payment terms (7 to 15 days) considerably limit exposure to fluctuations. Less time between invoicing and collection means fewer opportunities for the rate to change.
Requesting deposits is another effective strategy. You collect part of the amount immediately, reducing the risk on the balance. Consult our guide on how to invoice deposits for practical aspects.
Negotiate these conditions when signing the contract, before issuing the first invoice.
Contractual protection clauses
Include protection clauses in your contracts: a fixed exchange rate defined at signing, an adjustment clause if the variation exceeds a threshold (for example ±3%), or invoicing at the rate on the payment date.
These clauses must be clearly documented and accepted by your client before the start of the collaboration. They only work if both parties understand and respect them.
The adjustment clause is particularly useful for long projects: it protects both parties against extreme variations whilst remaining fair.
Bank account in foreign currencies
Opening a bank account in euros or dollars allows you to receive payments without immediate conversion. You keep the currencies and choose the optimal time to convert to CHF.
Additional advantage: if you pay foreign suppliers in the same currency, you avoid double conversions and their associated fees.
Disadvantages to consider: generally higher account maintenance fees in foreign currencies, and more complex accounting management with several accounts to reconcile.
Currency hedging
Financial hedging instruments (forward contracts, currency options) allow you to fix an exchange rate in advance for your future invoices. You thus eliminate uncertainty.
This strategy is relevant for large and regular volumes in foreign currencies. For a few thousand euros per month, the fees are generally not justified.
Implementation requires specialised banking support and a good understanding of financial products. Discuss this with your bank adviser if your exposure exceeds 100,000 CHF annually.
Tools and best practices
Effective multi-currency management relies on rigorous organisation and the right tools. Here is how to structure your day-to-day process.
Systematically document
Note the exchange rate used on each invoice in foreign currency. Keep supporting documents: screenshot of the SNB website, bank confirmation, or reference to a contractual rate.
Keep a tracking table listing all your invoices in foreign currencies with their date, original amount, rate used, amount converted to CHF, and actual collection date.
This documentation is essential for your accounting, your tax returns, and to calculate your exchange differences precisely. It also protects you in case of a tax audit.
Choosing the right tools
Some invoicing solutions allow you to create multi-currency invoices whilst centralising your accounting tracking in Swiss francs. This considerably simplifies administrative management.
BePaid allows you to invoice in different currencies with centralised accounting in CHF. You keep track of the rates used and monitor your collections in all currencies from a single interface.
Automated tracking reduces errors and saves you valuable time on bank reconciliation and preparing your tax returns.
Invoicing in foreign currencies opens up new business opportunities, but involves rigorous management of exchange rates, VAT and financial risks. The essential points: choose the currency suited to your client, systematically document the rates used, apply the correct VAT rules according to destination, and implement strategies to limit exposure to exchange rate risk.
Conversion to Swiss francs for your accounting must follow precise rules, and exchange differences can impact your result. Simple measures such as reducing payment terms, inserting contractual clauses or opening an account in foreign currencies can already make a significant difference.
For the VAT part on your international invoices, consult our complete guide on VAT on exports. With BePaid, create your invoices in foreign currencies in just a few clicks, manage your international clients and track your payments in a simple interface that complies with Swiss standards. Try it free now.
