5 Ways to Slash Cross-Border Billing Pains

The current state of international billing can create headaches for businesses seeking seamless cross-border transactions in a landscape of limited options. 

While a survey by EY highlighted the cross-border payments market surpassed well into the trillions, firms are still grappling with fragmented billing flows, unnecessary paperwork, client oversight, and cash flow delays hindering their ability to execute payments efficiently and scale their businesses.

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Outdated technology = Poor Customer Experience

Swift is now a 30-year-old banking infrastructure that relies on a complex chain of intermediaries. 

Meanwhile, most banks resist upgrading their core banking platforms and still rely on outdated manual or semi-automated processes.

Fluctuating exchange rates, timelines, and hidden fees accumulate for businesses and their clients creating cash flow challenges crucial for scale and negative impressions on client relationships. 

Clients who are faced with friction being billed, non-transparent costs or concerns over security may postpone and avoid the transaction, or not return for business altogether.

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Frictionless International Payment Winner…Credit Card

According to a survey by Deloitte, in today's digital landscape credit card fees are considered a normal cost of doing business, with nearly 85% of consumers utilize credit cards due to the rewards, security, and reducing payment hurdles. 

Additionally, 53% of North American consumers would stop conducting business with a provider who doesn't accept digital payments.

As a result, the majority of competing firms are offering credit card payments to simplify conducting business and improve the client experience.

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Truths about Surcharges and Convenience Fees in US & Canada

If processing fees are too much to stomach, passing the surcharge to the client is always an option but tends to leave a poor impression on the relationship.

Credit card surcharges are fees designed to cover the expenses of processing credit card payments exclusively. 

In contrast, convenience fees are used for the use of non-standard payment methods. Unlike credit card surcharges, which vary based on transaction amounts and are calculated as a percentage, convenience fees are fixed amounts.

It’s important to check specific state laws regarding surcharges as they can differ.

In the United States, you can refer to this guide on how to surcharge correctly from state-to-state. 

In Canada, businesses (excluding those in Quebec) can now impose surcharges on credit card payments. Key requirements include clearly disclosing surcharges before transactions to ensure they reflect actual costs.

For more detailed information for Canadian businesses, you can refer to the full article on BLG.

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Increase Revenue by Billing in Client Native Currencies

Currently, most automated billing platforms still do not support billing cross-border clients in their native currencies.

A Study from JP Morgan showed that international businesses had more negotiating power billing in native currencies, improving cash flow and customer retention.

Issuing invoices in the client's native currency also resulted in faster processing times and fewer disputes, benefiting both parties significantly.

“Canadian firms usings AccountGroove noted a significant increase in service revenue, simply by charging US clients in $USD instead of $CAD”

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For example:

With the CAD dollar softening, Canadian firms using AccountGroove observed a notable increase in service revenue by charging U.S. clients in USD instead of CAD. The payment is then automatically converted to CAD without incurring additional hidden fees.

Avoid Delayed Revenue Crucial for Growth

In today’s digital era late payments are unacceptable and 100% avoidable.  

A study by Atradius and CFO.com stated Currently, 55% of all B2B invoiced sales are overdue, with an average outstanding bill of 67 days. Additionally 11% of customers never got the invoice.

Accounts receivable departments still struggle with manual payment setup and follow-up, leading to prolonged processing times, increased administrative burden, and higher chances of payment discrepancies. 

Without automated collection solutions and reminder systems, businesses can focus resources on growth instead of struggling with manual payment setup and follow-up and chasing payments leading to strained client relationships.

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A Cure for eliminating Account Receivables

AccountGroove’s core feature resolves account receivables by collecting payments details prior to signing the engagement letter. The details are stored on Stripes PCI Top Level 1 systems and invoices are automatically sent and processed on an agreed upon payment schedule.

Businesses using an automated billing system have shown saving on average 10 hours per week, guaranteeing never chasing a late payment again.

Flying Blind with a Lack of Transparency

Many businesses receive a batch of lump sum payments leading to complicated reconciliation and a lack of transparency behind their clients and business. 

Lack of visibility throughout the payment process creates operational inefficiencies that hampers financial planning and increases the risk of errors and delays.

Utilizing a solution that not only reconciles payments inside of accounting software but also provides a layer of transparency into the value of each client creates better cash flow management to unlock scale.

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The 5 keys to Cross-Border Invoicing and Unlocking Revenue

Getting invoicing right is crucial toward efficient, timely international payments. When considering how to invoice international clients, some simple guidelines to consider are:

1. Create invoices in clients native currency and determine the most optimal payment method to reflect the service and client.
2. Collect payment details upfront: Utilize a payment service that collects and securely stores payment details before a client signs and accepts the engagement. This feature guarantees timely payments without the need for chasing late payments, placing your business revenue on autopilot. 
3. Deposits: Request a deposit or partial payment upfront to secure the transaction and mitigate the risk of non-payment or disputes. Firms reported collecting deposits ensured consistent cash flow and the ability to scale more efficiently. 
4. Streamline engagements with invoices and payments instead of sending separate proposals and invoices. Streamlining the 5 phases of billing into 1 automated loop saved firms 16+hours a week. 
5. Consider an invoicing platform with a dashboard for real time payment tracking, customizable template automation for recurring invoices and late payment reminders.

We’ve given you lots to think about as you operate your firm across borders. Pick a partner with in-depth knowledge and experience in navigating international financial systems. They can provide invaluable support in securely managing clients engagements, optimizing payment processes, and ensuring compliance with local laws. With the right partner, you can streamline your operations, minimize risks, and maximize growth opportunities.

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How AccountGroove Can Help

With over a decade developing enterprise commerce solutions internationally, AccountGroove is now publicly available to all finance professionals. Our proposal to the payment solution streamlines the fragmented billing process into 1 automated flow enabling cross border payments to maximize revenue growth. AccountGroove offers several advantages: 

• The only proposal management and payment solution that allows crossboard payments Credit Card payments in their clients native currencies while automatically converting payout in your firm's default currency
• Stripe partnership with top level PIC compliance improved fraud detection and financial crime prevention to make transactions more secure. 
• End-to-end automation and visibility, from engagement to payment, resolves cash-flow issues and reconciliation
• Learn more about what AccountGroove can do to support your international business expansion