Canadian with American clients: what currency to use?
September 23, 2014 3:06 PM   Subscribe

I'm a Canadian working in Toronto with an incorporated business, a business chequing account with one of the major banks (Canadian currency only), and a Paypal account connected to that chequing account. What should I consider when deciding whether to invoice American clients in Canadian or American dollars?

My options include:

1) Keep all project estimates and final invoices in Canadian dollars. American clients must somehow pay me (cheque, wire transfer, other options) in Canadian dollars.

Possible problems: Unfamiliar and annoying process for American clients; potential delays versus the usual direct deposits I negotiate with my Canadian clients. If I use PayPal, I'm eating 3% on every transaction.

2) All quotes and transactions stay in USD. This will require me setting up a bank account in US dollars at my bank, but will probably make the process faster and easier for my clients and prospective clients.

Possible problems: Small extra cost for me per month; extra time for me to set up the new account.

Are there any options or potential drawbacks/advantages that I'm missing?

If you have been part of cross border transactions like this, what advice would you offer?

Even if I make it easy for my clients with an American currency account, are there still some delays I should expect from cross-border payments?
posted by maudlin to Work & Money (10 answers total) 1 user marked this as a favorite
Best answer: I work for American clients, and to keep things simple for them I do everything in U.S. dollars. They are unlikely to have CA$ accounts, so otherwise it means having to convert amounts to US$ then the client sends a US cheque or wire for that amount, which you then have to convert back to CA$. U.S. clients don't tend to like the uncertainty of a fluctuating exchange rates either.

I set up a U.S. bank account through RBC's U.S. subsidiary. Since it's a real U.S. account (not merely a Canadian account denominated in US$), I can receive direct deposits there. They also let you deposit smaller cheques (up to something like $2000) by taking a picture using their mobile app (or using the camera from their web site), and those always clear within a few days, which is much faster than trying to deposit a U.S. cheque to a Canadian account. The exchange rate is decent as well, and money can be converted and transferred to a Canadian account instantly through their online banking. I think TD has a similar arrangement available.
posted by Emanuel at 3:21 PM on September 23, 2014 [1 favorite]

Best answer: Years ago (like 2005-ish) BMO used to take like 30 days to cash a USD cheque into a Canadian USD bank account . I'm not sure if anything has improved, but there will probably be some extra latency accepting USD.

Also, you're now exposed to currency risk. You'll have to come up with a strategy for converting to CAD on a regular basis and there will probably be tax implications with gains/losses depending on when you convert the money.

All that said, Americans have troubles dealing with anything but USD so quoting and billing in USD will probably go a long way to making clients happy.
posted by GuyZero at 3:24 PM on September 23, 2014 [1 favorite]

I have been billing US clients in USD and just adding a 3% surcharge if they want to pay by credit card (through Square) or Paypal. If you think they'd baulk at that (or you WANT them not to pay by cheque) then just hide the 3% in your rates. That's what I'm going to do, I think. Then every cheque is a bonus, rather than every paypal/credit card is a hassle/cost.

I think I will open a US account (TD - through their US banking system) for the business and transfer that between countries and accounts in the longer term.
posted by Brockles at 3:34 PM on September 23, 2014

I haven't had issues with my payment system, but I should point out that I have very wealthy clients (so they're pretty good about paying immediately) and also we are not problematically dependent on my wages for living expenses so maybe the delays would be more of an issue if you are, in which case I'd suggest trying to build a buffer once you find the most cost effective solution to allow you to use it.

That's what I'm doing right now with a line of credit for some other expenses. We're slowly catching up the line of credit and we're not panicking about peaks and troughs.

Essentially - the cheapest solution may not be the most timely, so finding the cheapest/easiest and factoring until the timing works enough for you may be an option that isn't immediately obvious to you?
posted by Brockles at 3:37 PM on September 23, 2014

I am an American resident, living and working in Europe and quote and bill US clients in US$. I am very sorry but they just don't understand or function well in anything else.
posted by DarlingBri at 3:38 PM on September 23, 2014 [1 favorite]

Best answer: Also, if you're converting small amounts of money don't forget to factor in the cost of currency exchange. The banks will bury it in their conversion rates, but it's still there versus posted rates.
posted by GuyZero at 3:42 PM on September 23, 2014

I'm not in your shoes but when I wire money to out of country vendors I have an option of paying in the local currency, I'm not required to send American Dollars that you'd have to convert.

That being said as someone who hires out of country vendors if I'm in the US I expect to be billed in USD its a common demoninator.
posted by bitdamaged at 3:45 PM on September 23, 2014

Response by poster: Looks like a consensus, then. (Pretty much the answer I expected, too.)

I'll quote and bill in USD, and will talk with my bank tomorrow about an appropriate account.

There have been a couple of mentions of both TD and RBC's American subsidiaries as an alternative to a USD account at a Canadian bank. Can anyone recommend a specific subsidiary or account that's worth looking at?
posted by maudlin at 4:49 PM on September 23, 2014

Best answer: For RBC, the subsidiary is officially called "RBC Bank (Georgia), N.A.". The web site is, and I set up my account at my local RBC branch in Canada. I have the Preferred Checking account because it gives me a slightly better exchange rate that makes up for the $20 monthly fee. I've been using them for six years, haven't had any problems.
posted by Emanuel at 5:23 AM on September 24, 2014

Best answer: DarlingBri is right, most Americans have no idea how to function with any banking/money system that isn't their own.

Something to know for future just in case you should ever have to send a USD-denominated check to a US business from your Canadian USD account: they must be deposited and processed separately from other checks. And now that my bank has started using those fancy ATMs that allow you to stick the checks in sans envelope, it won't accept the Canadian USD checks at all, I have to go into the branch. It's something about the routing numbers. Just an FYI in case you ever have a puzzled person saying your check "won't deposit" or the like.
posted by at 9:34 AM on September 24, 2014

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