Invoicing clients in US

[snorex]

What's the cheapest way to invoice clients in the US? Paypal / Stripe seem to have quite steep fees they take from each invoice.

Is Wise any better?

Thank you.

 

[CrashWire]

Are you asking how to invoice clients, or how to receive money from US-based clients?

The cheapest would be to ask them to wire/ACH into your Wise USD account.

 

[snorex]

Are you asking how to invoice clients, or how to receive money from US-based clients?

The cheapest would be to ask them to wire/ACH into your Wise USD account.

Hello, I am asking how to do both (invoice + receive money from them). If Wise doesn't offer invoicing, then I guess I can manually create invoices, send to client and ask them to pay via ACH to my Wise USD account?

Reason for asking for both features is that companies like Paypal offer both invoicing + receiving money but then charge extortionate fees so I am wondering if there are alternatives.

Thank you.

 

[BBCWatcher]

1. How do your customers prefer to pay? (An electronic transfer via ACH isn't a popular answer. Is there another answer?)

2. Where's the money supposed to end up (end goal)?

 

[cscs3]

What's the cheapest way to invoice clients in the US? Paypal / Stripe seem to have quite steep fees they take from each invoice.

Is Wise any better?

Thank you.

Yes very steep fee and you lost another 5% if you need to convert USD to S$.

 

[snorex]

1. How do your customers prefer to pay? (An electronic transfer via ACH isn't a popular answer. Is there another answer?)

2. Where's the money supposed to end up (end goal)?

Heya BBCWatcher,

Thanks.

1. I have no idea but I rather dictate terms than let them decide. So far ACH seems cheapest (for me in terms of fees deducted by Wise). (a) May I know why it isn't a popular option? (b) which options have you seen are most preferred?

2. I will keep the money in the account until I need to withdraw it back to a bank in Singapore and convert it into SGD.

Thank you and happy CNY (if you celebrate it)

 

[CrashWire]

Hello, I am asking how to do both (invoice + receive money from them). If Wise doesn't offer invoicing, then I guess I can manually create invoices, send to client and ask them to pay via ACH to my Wise USD account?

Reason for asking for both features is that companies like Paypal offer both invoicing + receiving money but then charge extortionate fees so I am wondering if there are alternatives.

Along with BBCW's question, I think you'll need to think about whether you absolutely need to allow your clients the ability to pay by credit card.

That's where the "extortionate fees" come in, because Stripe and PayPal are primarily credit card processors that offer "invoicing" (i.e. sending them an email asking for payment, and allowing you to reconcile it after) as a bonus feature.

 

[BBCWatcher]

1. I have no idea but I rather dictate terms than let them decide. So far ACH seems cheapest (for me in terms of fees deducted by Wise). (a) May I know why it isn't a popular option? (b) which options have you seen are most preferred?

It depends on the business context and level of trust. If for example you're selling shoes on eBay and expect buyers to send you U.S. dollars via ACH, forget about it. No one sane would do that. Visa, Mastercard, and the rest provide useful intermediation services to resolve basic disputes. Buyers know this and thus prefer card payments in such contexts.

However, as another example, if you're providing remote labor services and expect U.S. companies to pay you in arrears (but not too far in arrears), ACH is fine. (U.S. employers would often call this "Direct Deposit," and it's the most common way to pay U.S. employees). This is also almost always IRAS taxable income, by the way.

You don't have to tell us exactly what's going on, but some further context would be helpful.

2. I will keep the money in the account until I need to withdraw it back to a bank in Singapore and convert it into SGD.

Why? It's not going to earn any interest, or at least it's very unlikely to. U.S. dollars sitting in a deposit account of some kind will lose real purchasing power, lately at a fairly brisk clip. Don't you want to put these funds to work for you as soon as reasonably practical?

The reason I ask is that Wise cannot easily transfer dollars to, for example, a broker.

If you need to turn right around and make nontrivial U.S. dollar payments, OK, different story, and that context is helpful to know.

I should also ask whether you have any U.S. corporate entity established, such as a Wyoming LLC. Some people do that.

 

[snorex]

You don't have to tell us exactly what's going on, but some further context would be helpful.

Would you mind I DM you on this?

Why? It's not going to earn any interest, or at least it's very unlikely to. U.S. dollars sitting in a deposit account of some kind will lose real purchasing power, lately at a fairly brisk clip. Don't you want to put these funds to work for you as soon as reasonably practical?

The reason I ask is that Wise cannot easily transfer dollars to, for example, a broker.

If you need to turn right around and make nontrivial U.S. dollar payments, OK, different story, and that context is helpful to know.

I should also ask whether you have any U.S. corporate entity established, such as a Wyoming LLC. Some people do that.

Yes that makes sense. Should not leave money lying around. Unfortunately, I only have a few US clients so it might not be cost effective to set up a US entity just for this.

Thus, perhaps what I am trying to solve for is whether there is a way to allow me to bill US customers (i) cheaply with incurring extortionate credit card fees (ii) without establishing a US entity (iii) allows me to send the funds to a broker like Interactive brokers.

Thanks!

 

[snorex]

Along with BBCW's question, I think you'll need to think about whether you absolutely need to allow your clients the ability to pay by credit card.

That's where the "extortionate fees" come in, because Stripe and PayPal are primarily credit card processors that offer "invoicing" (i.e. sending them an email asking for payment, and allowing you to reconcile it after) as a bonus feature.

Thanks. I didn't think of that and should probably check with clients as well. But is my understanding correct to say:

> ACH = like the SG-version of FAST transfer = low fees
> Credit card = requires Stripe / Paypal = higher fees

Thanks!

 

[BBCWatcher]

Would you mind I DM you on this?

It's really not that important.

The basic issue is that if you insert some "friction" into the ability to receive payments then, in some business contexts, people are less willing to do business with you. Avoidance of a transaction fee becomes loss of business. If it's remote labor (billed in arrears) ACH is likely to work. If it's something else, it might not.

Yes that makes sense. Should not leave money lying around. Unfortunately, I only have a few US clients so it might not be cost effective to set up a US entity just for this.

Do you happen to have a U.S. Social Security Number (SSN) or at least a valid U.S. Individual Taxpayer Identification Number (ITIN)?

Thus, perhaps what I am trying to solve for is whether there is a way to allow me to bill US customers (i) cheaply with incurring extortionate credit card fees (ii) without establishing a US entity (iii) allows me to send the funds to a broker like Interactive brokers.

Well, there's a possible intermediate option: debit card acceptance. Some card processors charge a lower fee for debit card transactions. So if it makes sense for the business context then you can advertise "debit card: free, credit card: add 1.5%" (for example).

 

[snorex]

Do you happen to have a U.S. Social Security Number (SSN) or at least a valid U.S. Individual Taxpayer Identification Number (ITIN)?

Thank you. Nope, I don't have either of those. But I believe if I buy US ETFs that pay dividends through Interactive Brokers, then IB will have to file WHT taxes declaration on my behalf and create a ITIN for me?

 

[BBCWatcher]

Thank you. Nope, I don't have either of those. But I believe if I buy US ETFs that pay dividends through Interactive Brokers, then IB will have to file WHT taxes declaration on my behalf and create a ITIN for me?

No. Interactive Brokers doesn't have the ability to generate an ITIN.

I see some more fintechs competing with Wise such as OFX, Wallex, and Airwallex.

 

[CrashWire]

(iii) allows me to send the funds to a broker like Interactive brokers.

Withdraw your USD to a bank multi-currency account, then send to your brokerage from there.

I see some more fintechs competing with Wise such as OFX, Wallex, and Airwallex.

OP could use something like Stripe Atlas: https://stripe.com/atlas

 

[BBCWatcher]

Withdraw your USD to a bank multi-currency account, then send to your brokerage from there.

Not usually free in Singapore. There are long threads about that particular part of the problem.

OP could use something like Stripe Atlas: https://stripe.com/atlas

That's another competitor to Wise.

 

[snorex]

OP could use something like Stripe Atlas: https://stripe.com/atlas

Thank you, this looks interesting but will need to look into ongoing cost as well.

Can I check what are the benefits of creating a Stripe Atlas account? Is it so that I can ask clients to wire/ACH into my bank account and then I can use this bank account to send to Interactive Brokers (something I can't do with Wise)?

Key ongoing costs (not included in the setup fee)​

• Delaware registered agent—$100 per year (renewed automatically)
• Corporate tax preparation—packages start at $250 per year
• Delaware tax filing—preparation is free, Delaware fee starts at $225
• Bank account—apply via our partners or bring your own (fees, eligibility may vary)

 

[snorex]

No. Interactive Brokers doesn't have the ability to generate an ITIN.

I see some more fintechs competing with Wise such as OFX, Wallex, and Airwallex.

Thanks. Can you also let me know what ideas you were having should I get an ITIN?

 

[BBCWatcher]

Thanks. Can you also let me know what ideas you were having should I get an ITIN?

It gets potentially easier to open a U.S. bank or U.S. credit union account.

 

[CrashWire]

That's another competitor to Wise.

Stripe Atlas is a different beast. Wise provides a US-domiciled account number; Stripe Atlas provides US incorporation services, which includes a corporate bank account.

Can I check what are the benefits of creating a Stripe Atlas account? Is it so that I can ask clients to wire/ACH into my bank account and then I can use this bank account to send to Interactive Brokers (something I can't do with Wise)?

Seriously it'll be much cheaper to just eat the $10 incoming wire fee and transfer to IBKR every month or so, than to handle the compliance requirements for a US company.

 

[snorex]

Seriously it'll be much cheaper to just eat the $10 incoming wire fee and transfer to IBKR every month or so, than to handle the compliance requirements for a US company.

Hey CrashWire, so may I know what your suggestion is here? Transferwise doesn't allow transfer to IBKR.

Are you suggesting send from Transferwise --> Local SG bank account --> IBKR?

Thanks.