STEP 6, Consider Analyzing Your Customers Country

Normally when your customers are paying your invoices it does not cost you anything apart from few situations. Your customers transfer money to you as international payments (normally your customers are from another country) or you receive cheques.

When an international payment transfer is ordered the sender needs to specify who should pay the handling of the transfer.

An international payment consists of:

[box style=”2″]Exchange rate costs + Exchange costs + Sender’s bank handling costs + {B1, B2…*} + Receiver’s bank handling costs[/box]

The sender can choose following handlings:

  1. Sender pays all costs (expensive, the sender will not only pay the receiver’s costs as well, but this handling is often charged even more)
  2. Sender and receiver share the costs (this is default handling and the most usual)
  3. Receiver pays all costs (not allowed any more in the EU, but still available in some countries. Rarely used)

The costs for the receiver is normally EUR 5-8.

In our example our bank account (country of origin, see Step 1… ) is in Denmark, and we have made the following chart on our customer:

Incoming payments per month

All the payments from Denmark cost nothing, but the costs for the following countries would be (our cost per received cross border transaction is EUR 5):

0 × 440 + 5 × 30 + 5 × 310 + 5 × 160 + 5 × 20 + 5 × 55 = EUR 2875
EUR 2,875 / Month – Quite expensive!

So what can we do about that?

To avoid the transfer fee we can either get a better deal with the bank or have a bank account in those countries, where we do have the most incoming payments.

In our example we will open a bank account in the United States as we do have most payments from this country.

The new monthly cost would become:

0 × 440 + 5 × 30 + 0 × 310 + 5 × 160 + 5 × 20 + 5 × 55 = EUR 1325
EUR 1,325 / Month – Quite expensive!

We have saved: EUR 1550 / month (minus the monthly fee of having a cross border bank account).

Of course it is not free of charge to open a bank account. It also cost something each month just to have a bank account and those fees need to be considered.

It is dependent of which bank you choose, but the cost of having a bank account would be about EUR 70. This still gives a great advantage of having the bank account in The States, even though it costs something to open the bank account, and you may also pay some fees, when you will transfer the money back to your other bank account.

A little hint if you wish to open a bank account abroad, ask your own bank first, maybe they already do have branches in the desired country or at least they normally have some cooperative banks. This way of opening the bank account will save you a lot of administrative work in most cases. It would also be a great advantage if your own bank have branches, as the web bank software then would be the same and you have the overview of your bank accounts in the same web bank.

For some transfers you can risk that there will be even more banks involved (such banks are called intermediate banks B1,B2…). Unless you know how the transactions can be made by banks (very few people know of this) the banks involved are outside your scope. Unfortunately each intermediate bank is allowed to take a fee from the money transferred, and this without the customer’s knowledge. For cheques, situation is different. A cheque guarantees that the amount will go to receiver and all fees are charged the receiver’s bank. In our case we will assume that only the sender and the receiver banks are involved in the payment transaction.


  • Great savings dependent of the number incoming cross border payments


  • If your bank does not have a branch in the needed country, you need some administrative effort to handle your cross border bank account in a new web bank software. You will have new login using more passwords etc.
  • If your customer’s localization changes, you will have a cross border bank account which costs you each month, even when you do not have customers left in the specific country.

The catch

  • Be aware, if you would like your ERP-system should support the new bank account, you need to build a new interface (new formats, communication lines etc.) for your ERP-system. This is normally considered development costs.

If you are already using AMC-Banking, it is which more likely to have the interface build in already.