If you’re a business based outside of the United States but use Paypal to collect US dollars, Paypal might be double-charging you.  First, you pay the usual Paypal fees.  Second, you’re probably paying Paypal another 2.5% to exchange your money from USD to your local currency.

You’d think that if you have a US dollar account with your local bank, you could just have Paypal deposit it to your US dollar account.  But they won’t; they’ll only deposit US dollars to US-based banks.  They won’t send you a cheque either.  They’re making easy money by skimming 2.5% off the exchange rate, and they like it that way.

Here’s how we got around it in Canada.  You might be able to do something similar in other countries as well.

First, we looked for a bank based in the US that would let us set up a business account with them.  If you’re a sole proprietor, you might be able to set up a personal bank account, which is a little easier.  We used Harris Bank.

Then, we looked for a good foreign exchange (forex) business to exchange our US dollars to Canadian dollars.  Most offered us rates that had a markup of only around 0.5 - 1 percent off the mid-market rates.  This meant that we’d save about $200 each time we exchanged $10,000.  We’re planning on donating this extra money to charity.  We chose Calforex, which is reputable, convenient, and offers competitive rates.

After setting those up, here’s how we transfer money:
1.  Withdraw money from Paypal into our US bank account (at Harris).
2.  Write ourselves a cheque from Harris to our local US dollar bank account.
3.  Arrange a trade with Calforex to convert our US dollars to Canadian dollars.

This takes some extra time to set up, but it’s worth it if you have sufficient volume or you’re annoyed with Paypal.

Next time you need to invoice a customer, the quickest thing to do might be to open up Microsoft Word, find an invoice template, and fill it out. But by investing a bit more time into setting up some business software for invoicing once, you get the following 5 benefits as free side effects forever:

1. Save copies automatically - Instead of printing and filing extra copies of your invoices every time, have them automatically saved for you.

2. Quickly search old invoices - Is a customer calling and asking about an invoice? Instead of fumbling through papers to find it - search electronically by customer, date, or invoice number and find it right away.

3. Track payments - Track payment status right with the invoice instead of keeping separate books.

4. Get reports on sales history - How much money did you make last month? How did your sales in April compare to March? Get these answers right away, without tedious calculations.

5. Automatically track inventory - If you sell products, why enter your invoices in Word and then update your inventory somewhere else? Have it all done for you in one package.

What can you use to get all these benefits? Two common choices are the Quickbooks Accounting Software and Microsoft Office Accounting. Or we designed inFlow Inventory to be a better choice for both non-accountants and people who stock and sell products. You can download the Free Edition right now, which allows you to send out unlimited invoices for free!

Do you know an entrepreneur who might want to improve their invoicing habits?