Multi Currency Invoicing Explained on a 2,000 USD Invoice

An invoice of 2,000 USD issued when €1 equals 1.0800 USD is worth €1,851.85 in the books. Paid when €1 equals 1.1000 USD, it brings in only €1,818.18. The rates in this article are examples from a French freelancer booking in euros, so you can redo each multi currency invoicing calculation yourself.

Invoicing in several currencies means issuing invoices in a currency other than the euro, depending on the client, while keeping your books in euros. The 2,000 USD invoice above is followed from the quote, where the currency is fixed, through conversion at the official rate on the issue date and the VAT or exemption mention, to the exchange difference booked when payment arrives.

Key takeaways

• Set the currency in the quote or contract before the first invoice, and add an exchange-rate variation clause if the gap worries you: without a written agreement, the exchange risk is yours.
• Convert into euros at the official rate on the issue date (ECB or Banque de France) and note that rate on the invoice or in your file.
• If French VAT applies, its amount must appear in euros on the invoice. If it does not apply, the exemption mention is enough.
• When payment arrives, don't correct the invoice: the difference between the issue-date rate and the amount received goes into your books as an exchange gain or loss.

Which currency should the invoice be in, and who decides?

You can invoice in any convertible currency, identified by its ISO 4217 code (USD, GBP, CHF…). Whether this is allowed, and under what conditions, depends on the country where you are based, so check the rule that applies to you. The choice is negotiated between you and the client, in writing.

In practice, an American client paying from a dollar account may prefer an invoice in USD: they avoid converting on their side.

Our case: a French freelancer invoices 2,000 USD of services. Before issuing, they have three things written into the quote: the currency (USD), the payment term (30 days) and, if they wish, a clause that adjusts the price if the rate moves beyond an agreed threshold.

Always show the currency code next to every amount, line by line and in the total. "$2,000" on its own is ambiguous: the symbol exists for the US, Canadian and Australian dollar.

Which exchange rate should you use on the invoice date?

The reference rate is the official rate on the issue date, published by the European Central Bank or the Banque de France, according to economie.gouv.fr.

The ECB quotes "€1 = X USD". Suppose 1.0800 on the issue date. The calculation is a simple division:

2,000 USD ÷ 1.0800 = €1,851.85

This is the euro value you record in the books at issue. Keep a record of the rate and its date (a screenshot, a line in the client file). An inspector or your accountant should be able to redo the calculation.

A reading tip: the higher the quoted figure, the more dollars one euro buys, so the fewer euros your dollars are worth.

What happens to VAT when the invoice is in a foreign currency?

The currency does not create VAT. It only changes the display unit when French VAT applies. In the French example used here, the total VAT to be collected has to appear in euros on the invoice; check the rule that applies where you live.

Two cases for our 2,000 USD invoice:

• Business client outside the EU, service provided: as a general rule, French VAT does not apply. You state the exemption mention that fits your situation (for example "VAT not applicable" followed by the legal reference your country requires) and the invoice stays in USD. Check your situation with your accountant if the service is unusual.
• French VAT applies (a client in France invoiced in USD, for example): at 20%, VAT is 400 USD. Converted at the day's rate, 400 ÷ 1.0800 = €370.37. The invoice shows 2,000 USD excl. VAT, 400 USD of VAT, 2,400 USD incl. VAT, and the line "VAT: €370.37".

Under the VAT exemption scheme for small businesses (franchise en base), no VAT is charged and the corresponding legal mention replaces all of this.

What happens when payment arrives at a different rate?

When the money arrives, the client pays 2,000 USD, never a euro more or less. Only the euro value moves. The difference between the value at issue and the value at payment is an exchange difference, recorded as a gain or a loss, without touching the invoice.

Take the issue value of €1,851.85 and three possible rates on the payment day:

Rate at payment (€1 =)	2,000 USD are worth	Difference vs issue
1.0600 USD	€1,886.79	+ €34.94 (gain)
1.0800 USD	€1,851.85	€0
1.1000 USD	€1,818.18	− €33.67 (loss)

In the third scenario, the €33.67 loss is about 1.8% of the invoice.

On the accounting side, differences recorded at payment go to foreign exchange gain or loss accounts. Invoices still unpaid at year-end are revalued at the closing rate, using conversion difference accounts. Ask your accountant which account numbers apply where you live.

Watch out for fees: if your bank converts the dollars, the amount credited may be lower than the theoretical calculation. That difference is not an exchange difference but a conversion cost. Keep them separate in your notes.

Who is invoicing in several currencies for, and when should you stay in euros?

Invoicing in a foreign currency mostly serves those whose clients pay in another currency: freelancers with American, British or Swiss clients, small businesses selling outside the eurozone, providers paid by foreign platforms. It isn't worth the detour for a single, one-off, small client.

Stay in euros if:

• the client is in the eurozone: no reason to complicate things;
• the amount is small and the client agrees to pay in euros (the conversion is then on them);
• you really don't want to deal with exchange differences: invoicing in euros protects you, but the client bears the risk instead, and may negotiate the price accordingly.

Switch to a foreign currency if the client insists, if you have expenses in that same currency (a dollar account then lets you pay without converting), or if you want the price to stay readable for them.

A simple rule: as long as you can't explain to your accountant in two lines where each euro amount comes from, don't multiply currencies. One is enough to start.

How do you create and export your first foreign-currency invoice (PDF and CSV)?

1. Choose the currency (USD) and write it into the accepted quote.
2. Enter the lines in USD: for example 4 days at 500 USD = 2,000 USD.
3. Look up the official rate for the issue date and divide: 2,000 ÷ 1.0800 = €1,851.85.
4. Add the VAT or the exemption mention, with the VAT in euros if it applies.
5. Export to PDF for the client.
6. Export to CSV for your accountant: currency, amount in USD, rate, date and euro value on the same line.

With Split The Bill, you create and send the invoice, the client receives it by link without downloading anything or creating an account, and you export PDF and CSV. The calculation is deterministic: same rate, same result, no AI estimate.

Frequently asked questions

Do you need to issue a credit note when the rate changed between issue and payment?

No. A credit note is only justified if the price in dollars itself is changed.

What should you do if the client pays in several installments, for example with a deposit?

Each payment has its own rate. A 500 USD deposit received at one rate and the 1,500 USD balance received later at another each generate their own exchange difference. For each transfer, keep the date and the amount actually credited in euros. Your accountant will only have to add them up.

Where should you start this week?

Create your first foreign-currency invoice with Split The Bill.