Currency of invoice

Choosing the invoicing currency affects which party faces a conversion exposure and when. An exporter invoicing in its home currency transfers some exchange-rate uncertainty to the customer, while a foreign-currency invoice can leave the exporter exposed until receipt. Bargaining power, competitiveness, customer preferences, legal requirements and other contractual terms influence the choice. A home-currency invoice does not eliminate all economic currency exposure: competitors and demand can still change when exchange rates move. Examine actual payment terms and any subsequent hedge.