FX & International Payments

How to pay an international invoice

16 Feb 2022

It’s easy to understand why businesses want to trade and hire talent internationally. Adopting a global mindset can open up opportunities and make companies more competitive. But how can UK businesses be globally active without having to pay costly fees when they transfer money overseas? With an international business account, it’s easy.

Business banks are often more expensive

The only way for businesses to pay international invoices was, until relatively recently, through their business banks. Fortunately, there are many more options when sending money abroad nowadays, and some of them are quicker and come at a lower cost. 

That said, many SMEs still use their bank when paying international invoices. Business owners are used to paying domestic invoices in this way, so they might assume it’s easier to stick with the same option for international invoices. But that’s not the case. 

Often, banks charge excessive fees and use unfavourable exchange rates. They don’t always use the latest international payment technology to facilitate fast transactions, and this can harm cash flow and wait times can strain supplier relationships. 

What's the alternative?

Use an international business account

Complicated and costly international payment systems are a thing of the past. 

Complicated and costly international payment systems are a thing of the past. Powered by Wise, Funding Options offers SMEs a faster and more cost-effective way to handle FX and international payments. By signing up for an international business account, you can benefit from rates that are up to 10 times cheaper than your bank’s. 

It’s also 19 times cheaper than PayPal.

Fully regulated by the Financial Conduct Authority, the service operates using innovative international payment technology. You don’t have to worry about hidden fees; you can pay invoices for 50+ currencies and use the actual foreign exchange rate in 70+ countries.  

Funds can be received into ten currency accounts and be kept there until you need to make payments. When you pay an international invoice using your account, the funds will quickly appear in the recipients’ account, with 40% of payments arriving instantly. You can also move and convert money into other currencies without paying high conversion fees. 

What details do you need to pay an international invoice?

Although the international invoices you receive might be in different currencies, VAT rates will vary depending on the recipient’s country of residence, payments, details and dates. Any international invoices you pay must comply with UK regulations.

1. IBAN & BIC

You’ll need to ask for your supplier/recipient’s International Bank Account Number (IBAN) and bank identifier code (BIC) if they haven’t already provided it.

2. Reference number

Everyone has their unique way of referencing an invoice. In some cases, the invoice reference number is the date (or year) followed by a number that denotes how many invoices they’ve issued this year so far, e.g. 200214 (year and invoice number 14).

3. Overview of items/services

Details of the products or services supplied should be included on invoices, alongside a breakdown of quantities and prices. Freelancers may include a breakdown of the hours they’ve worked and any assignments they’ve completed (tasks may vary in price).

4. The currency

It’s up to you and the supplier to agree on a currency. You can use your Wise-powered international business account to pay in over 50 currencies worldwide, benefit from better foreign exchange rates and use the actual foreign exchange rate in over 70 countries. 

5. Company registration number

Not applicable to freelance suppliers, but any limited companies you work with might add their company registration number to their international invoice.

6. Payment terms

As is the norm with domestic invoices, your international suppliers are likely to include their payment terms, such as the date you need to pay by (e.g. within 30 days). As well as a deadline, they may also include details of any penalty charges for late payments.

Are you ready to facilitate fast international payments?

Registering for your account is simple. We’ll ask for a few basic details, including your location and industry. Then we’ll verify your identity before setting you up. 50% of payments are immediate or arrive within an hour, which should keep your international suppliers happy!

Get an international business account

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