Exchange Rates

[Badger]

I'm doing more and more offsite work for a US based client. Last month I just took the GBP/USD exchange rate as at 6pm on 31st from the BBC website, and applied that to my invoice, lazy I know but it was the 31st!

I'd like to apply the monthly average rate to my invoices, as that's a fairer way of evaluating the worth of work done over the period, but I cannot seem to find a website that gives me this easily, and I really don't want to have to do this daily and take an average. Also, what is the 'official' rate as every site I've checked gives a different value, and when does the rate for that day close, 6pm, 8pm?

So, on 31 Jan (I should do it on 1 Feb right?) I want the average GBP/USD exchange rate for Jan. Sounds easy, and probably is.

Thanks in Advance

[ratewhore]

Do you have a contract? If so, shouldn't that state a prevailing exchange rate? If not, pick the rate which is most advantageous to you...

[expat]

I'm doing more and more offsite work for a US based client. Last month I just took the GBP/USD exchange rate as at 6pm on 31st from the BBC website, and applied that to my invoice, lazy I know but it was the 31st!

I'd like to apply the monthly average rate to my invoices, as that's a fairer way of evaluating the worth of work done over the period, but I cannot seem to find a website that gives me this easily, and I really don't want to have to do this daily and take an average. Also, what is the 'official' rate as every site I've checked gives a different value, and when does the rate for that day close, 6pm, 8pm?

So, on 31 Jan (I should do it on 1 Feb right?) I want the average GBP/USD exchange rate for Jan. Sounds easy, and probably is.

Thanks in Advance

I think the Bank of England has a monthly average available on their website. I note though that there is no such thing as an "official" exchange rate. The BofE emphasize that their rate is not "official".

Why do you need the exchange rate? Or more precisely, why do you have to be so precise? I invoice in Euros and have it paid into my GBP Co bank account: So if I invoice 10000 EUR, I put that on my invoice as 10000 EUR and (say) 8000 GBP. The client actually pays 10000 EUR, and if in the meantime the rate has changed, then my bank credits me with (say) 9000 GBP.

So from the point of view of my accounting, I have an invoice payment of 8000 GBP plus an "exchange gain" of 1000 GBP. So everything adds up; and if I had been able to put on the invoice the figure that would later become reality, i.e. 9000 GBP instead of 8000, it wouldn't have made any real difference: 9000 GBP invoice plus exchange gain/loss 0.

[Badger]

I think the Bank of England has a monthly average available on their website. I note though that there is no such thing as an "official" exchange rate. The BofE emphasize that their rate is not "official".

Why do you need the exchange rate? Or more precisely, why do you have to be so precise? I invoice in Euros and have it paid into my GBP Co bank account: So if I invoice 10000 EUR, I put that on my invoice as 10000 EUR and (say) 8000 GBP. The client actually pays 10000 EUR, and if in the meantime the rate has changed, then my bank credits me with (say) 9000 GBP.

So from the point of view of my accounting, I have an invoice payment of 8000 GBP plus an "exchange gain" of 1000 GBP. So everything adds up; and if I had been able to put on the invoice the figure that would later become reality, i.e. 9000 GBP instead of 8000, it wouldn't have made any real difference: 9000 GBP invoice plus exchange gain/loss 0.

The client pays the GBP amount on my USD invoice, so they take the gain/hit on exchange.

[expat]

The client pays the GBP amount on my USD invoice, so they take the gain/hit on exchange.

They pay a fixed USD amount, but pay it in GBP at the rate that you state? Hmm.

[Badger]

They pay a fixed USD amount, but pay it in GBP at the rate that you state? Hmm.

Yes, and it's paid within 4hrs

[Solidec]

Wow I would love to be in your position. Small, even a 2% markup on the real exchange rate every month and you make a tidy "bonus"

All above board I imagine as there is no contractual oblication to state any specific exchange rate?

How bizzare, are your clients a bit thicko or just awash with loadsmoney, and if the latter, can I get a job please

[Moscow Mule]

Wow I would love to be in your position. Small, even a 2% markup on the real exchange rate every month and you make a tidy "bonus"

All above board I imagine as there is no contractual oblication to state any specific exchange rate?

How bizzare, are your clients a bit thicko or just awash with loadsmoney, and if the latter, can I get a job please

The inland revenue publish a monthly average rate (at least they do for EUR, I expect they do the same for USD) which you need to use for accounting purposes.

The extra you make counts as profit for CT (IIRC - it's been a while since I was a "Moscow" mule )

[expat]

The inland revenue publish a monthly average rate (at least they do for EUR, I expect they do the same for USD) which you need to use for accounting purposes.

The extra you make counts as profit for CT (IIRC - it's been a while since I was a "Moscow" mule )

Excuse me if I'm wrong, but isn't that just for VAT? For accounting, you don't need to use that rate.

And surely the extra you make counts as company income: not profit unless retained.

[Badger]

Wow I would love to be in your position. Small, even a 2% markup on the real exchange rate every month and you make a tidy "bonus"

Indeed, although I think I'd be foolish to push my luck really.

All above board I imagine as there is no contractual oblication to state any specific exchange rate?

How bizzare, are your clients a bit thicko or just awash with loadsmoney, and if the latter, can I get a job please

Yes, all above board. The consultancy emails me the work, I VPN in, do the tasks, email back the work completed, log the hours, and invoice monthly. They'll be making a nice margin as it's all being re-billed to the end client anyway.