We have internal departments which would like to pay invoices stated in foreign currency in USD currency. Why we do not pay documents other than how they are stated?


We are not aware of an international law or protocol governing this. Generally, it depends on the business agreement between parties. Beyond that, it is essentially a business decision and how your company should apply the Generally Accepted Accounting Principles (GAAP) for international operations and foreign currency impact.

As for control, if you pay in the foreign currency, then you know when you make the payment what exchange rate you are getting. Global companies may have bank accounts in several countries and currencies,and will contrive to pay in the most advantageous way depending on the exchange rate at the time of disbursement vs. the date of the invoice.

Those with U.S. bank accounts only can choose to pay in the foreign currency and deal the exchange rate when the check is cut, or pay in U.S. dollars, and accept the exchange rate when the vendor cashes the check. In the latter case, the foreign vendor accepting your check in U.S. dollars may gain or lose according to the exchange rate when they cash the check.

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