Delivering professional services to international clients involves managing currency fluctuations, correspondent banking deductions, and cross-border invoicing compliance. Structured billing conventions minimize payment friction and unexpected transaction costs.
1. Allocating Intermediary Bank Charges (OUR, SHA, BEN)
When wire transfers move internationally across the SWIFT network, intermediary correspondent banks often deduct handling fees along the payment path. International contracts and invoices should explicitly designate fee allocation under Field 71A of standard SWIFT instructions:
| SWIFT Fee Code | Operational Definition | Financial Outcome |
|---|---|---|
| OUR | Ordering customer (client) covers all wire and intermediary charges | Contractor receives 100% of the invoiced amount |
| SHA (Standard Default) | Sender pays their bank's charges; beneficiary pays intermediary and receiving charges | Invoiced sum is reduced by intermediary deductions (typically $15–$45) |
| BEN | Beneficiary (contractor) absorbs all transfer expenses | Substantial wire deductions from total invoiced sum |
For cross-border consulting agreements, specify: "All payments must be remitted via wire transfer under SWIFT charge instruction OUR, ensuring the net invoiced amount is received in full without deductions for correspondent banking fees."
2. Standard Requirements for B2B Cross-Border Invoices
To comply with corporate accounting audits and tax regulations, an international commercial invoice should contain:
- Unique Serialized Invoice Number: Sequential numbering without gaps.
- Issue Date and Due Date: Clear payment terms (e.g., Net 14 or Net 30).
- Party Identifiers: Full legal names, business registration numbers, and physical commercial addresses for both contractor and client.
- Itemized Description: Clear description of deliverables or time-and-materials services rendered.
- Reverse Charge Notation: When providing cross-border B2B digital services where VAT is not charged locally, state: "Reverse charge: VAT to be accounted for by the recipient pursuant to applicable national tax legislation (EU Directive 2006/112/EC Article 196 where applicable)."
3. Mitigating Foreign Currency Volatility
When operational living expenses are incurred in a local currency but contracts are denominated in USD or EUR, exchange rate volatility can impact net margins:
- Multi-Currency Accounts: Receive funds directly into foreign-currency IBAN accounts to avoid forced automatic conversions at retail bank spreads.
- Conversion Discipline: Convert funds in planned intervals or use forward contracts when managing predictable operational cash flow requirements.