Should I accept payment in EUR or GBP

[TheCyclingProgrammer]

Forget all this nonsense about VAT. When you invoice, you add VAT. It's that simple.

What the agency is really doing is asking for up to three months credit terms on the VAT element of your invoice because their cash flow is obviously bad enough that they can't wait until their quarterly VAT return is submitted to reclaim the VAT. They are entitled to ask, there's nothing illegal about offering credit.

On one hand that's not your problem, on the other hand it is if their cash flow is bad enough that you end up not getting paid. You will be liable for the VAT you've charged. Alarm bells should be going off and I hope you've done some due diligence on this agency!

[TheFaQQer]

If you are going to take the contract, I'd go for short payment terms because of the concerns over cash flow.

I'd also make sure you have some kind of cover in place in case the agency goes bust - if you join IPSE as a plus member that is included in the package.

[FrontEnder]

The agreed rate is in GBP. I have managed to convince agency that the rate will be in GBP.

Good, that's how it has to work really.

I've no experience of this, but I don't see how it would work if you invoice in one currency, but get paid in another. The amounts will never match, so you'll bill 1000GB, but when that is converted and goes into your bank account, you'll get something like 965.56GBP. I've not idea how you would explain that shortfall (or extra if the exchange rate is favorable).

This also works for the agency/client contract too, so it may be worth suggesting that the agency also bills the client in GBP and gets paid in GBP.

As others have said, I'd be seriously worried about the agency, but especially if they're billing in EUR, but paying you in GBP. The rate is currently about 1.22, but not long ago was about 1.45 and the highest I remember was arounf 1.5. If it returns to those levels, and the agency is on 15%, that's their cut gone and possibly even making a loss.

For a one man band agency, that's a very big deal. Even for a large agency, they'd probably try to find a way to pass the loss on to you, which is a hassle you could really do without.

I'd be looking for something else and in the meantime get clarification on the agencies payment terms with the client. This is looking very risky so I wouldn't be shy about getting these answers from the agency.

[KentDogWalker]

Right now the Euro is making great gains against GBP.

[SueEllen]

Right now the Euro is making great gains against GBP.

And?

[KentDogWalker]

And?

Take your quote in EUR if it was made before the GBP/EUR drop

[ShandyDrinker]

Right now the Euro is making great gains against GBP.

From experience that is a dangerous observation to make with the inference that it will continue to do so.

Take your quote in EUR if it was made before the GBP/EUR drop

Unless you're able to hedge GBP/EUR so you know exactly what rate you'll get throughout the course of the contract the best approach will always be to ensure you're paid in the base currency of your company.

If you like the idea of speculating on the direction of travel of exchange rates then it may be worth a punt. However, if you are relying on the exchange being +/- 5% of what it is today then I still think one of the earlier comments in the thread about the exchange rate being within a certain range otherwise a renegotiation is triggered is a sound one.

[SlipTheJab]

What what I've read so far I would be running (not walking) away from this contract, way too risky.

[WordIsBond]

What what I've read so far I would be running (not walking) away from this contract, way too risky.

I'd run it through my shredder before running away from it.

Nothing wrong with being paid in euros, I do foreign currency stuff all the time. The rate has to be high enough to compensate you for the exchange rate risk, that's all. Everything's negotiable.

You put a value on the risk, and on the cost of exchanging currencies (pretty small if you find out what to do), and if you get paid enough to compensate you for that, go for it.

But this whole thing smells very bad.

[tim123]

Personally, I'd insist on GBP, which reduces both your risk and hassle factor. It seems odd to me that one UK company (agency) would pay another UK company (YourCo) in EUR.

Because they are being paid in Euro and, as they are only a middleman, don't see why it is they who should take the currency risk.

Most agencies think this way.