6 things freelancers should consider when dealing with international clients
The ability to provide services to international clients via the Internet is a major advantage to freelancers. However, there are a number of factors to consider when you deal with foreign customers that you might not have to contend with in a domestic market.
The following are some of the most important considerations for freelancers with international clients, along with insights and tips to help you succeed.
Language and Culture Barriers
Modes of doing business vary around the world. In some countries, more casual or informal language is appropriate during phone calls, emails, or other digital communication. In other countries, business conversations remain professional and etiquette is a priority. Before taking on clients in a given market, learn the culture.
Language barriers can create challenges as well. Working with a client speaking a different language creates requirements for translation and risks for misinterpretations. Fortunately, there are a number of great translation software programs to help.
Time Value of Money
By factoring in ancillary costs of foreign activities, you could set your rates to match what you earn domestically on projects. However, think about the time value of money. If language, communication, and other obstacles slow you down a lot, you may not earn enough with a particular client to continue the work. In this case, adjust rates accordingly, or share politely and honestly your need to end the service.
Some payment systems are optimized for domestic clients, while others specialize in global or international processing. When choosing a payment processing provider, take note of any differences in cost for processing international transactions than for processing domestic ones. Factor that difference into your price so that you do not lose money on international deals.
Currency Exchange Rates
You may not have realized that when you do business with international clients, your income is affected by currency exchange rates. If you take payment in the client’s currency and convert it to your own, you may benefit or suffer. If the client currency is weak relative to your own, your income after conversion is relatively low. Keep in mind that you often pay some fees, whether direct or indirect, for conversion. Invoicing and requiring payment in your own currency is a way to avoid the hassle.
Your communication access and delivery schedule are impacted when you work with clients in different time zones. Trying to reach a client with a last-minute question when it is 3:00 a.m. their time is difficult. Thus, you might have to work ahead to avoid such issues. Similarly, ensure you know which time zone stated deadlines are given in so you can adapt to your local time.
There are sometimes tax implications when conducting business in foreign markets. Given the wide variance in implications, it is best to review the IRS website resources on foreign income and to discuss your activities with an accountant.
Before you work with international clients, consider how these factors affect your business, income, and taxes. Research and preparation help set you up for success in your business activities and financial management. If you are considering doing business internationally, Payoneer offers global payment processing. Check out our solutions for freelancers today.