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Lane
Lane, CFP, MBA, CRPS
Category: Tax
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Experience:  Providing Financial & Tax advice since 1986
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Domestic company has begun paying foreign vendor via wire transfer.

Resolved Question:

Domestic company has begun paying foreign vendor via wire transfer. Initial wire occurred because mailed payment did not get received by vendor. It was as a courtesy to get the payment made faster. We have now made our subsequent payments via wire transfer to protect from problems with mailing overseas. The accompanying bank wire transfer fees have been paid by us (domestic company). We are considering passing the bank fees on to the vendor. How can we do this? Should we do this? Example of wording to let the vendor know of our intention to pass the accompanying fee on to them? Thank you for your input.
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

How can we do this?


One possibility ... Deduct the cost of the wire transfer from the payment.

Another, ask them to adjust their invoice price by the amount of the cost to remit payment back to them.



Should we do this?

This is a very acceptable business practice, and is certainly legal, if disclosed.




Example of wording to let the vendor know of our intention to pass the accompanying fee on to them?


Mr/Ms xxxxxxxx,

After having a problem getting time payment to you, we rectified by having the money wired to you. To continue this on a regular basis would be (has become, is now) cost prohibitive (too expensive, more expensive, too costly, require us to raise the price of our product, and we have found that this is a cost that our customer will not pay , etc. etc.)

Option 1:

We would like your input on how to handle this. We see our options as (1) return to the process of mailing payment, (2) deduct wire transfer fees from our payment or (3) have you net the amount from your invoice/bill to us.

Option 2:

Would you prefer that we return to the process of mailing payment, or handle this through a reduction of price somehow?



Hope this this gives you enough to work with or possibly generate a related idea!

One final thought for you: An ACH (automated clearinghouse) will transfer in 2 to three business days and is something that any bank can do, sometimes for free ,., certainly MUCH less expensive, depending on the bank.



Hope this Helps,

Lane

Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3647
Experience: Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Thank you, XXXXX XXXXX advice and just what I was looking for.


 


Have a great day!


 


Terri

Expert:  Lane replied 1 year ago.

YW Terri

Thanks for the feedback!

Lane
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3647
Experience: Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you

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