[ED. NOTE: the following query and its responses were originally
posted on AUTOACQ-L, which is a list devoted to automation
issues in acquisitions. Because the topic is appropriate to a more
general discussion, ACQNET-L is reposting them for your reading
pleasure and so ACQNET subscribers can weigh in the topic.]
Date: Wed, 05 May 2004 16:49:35 -0400
From: Mary Seligman (Adelphi Univ.) <Seligman_at_ADELPHI.EDU
<mailto:Seligman_at_ADELPHI.EDU>>
Subject: Foreign currency conversion
Good morning:
We use a number of overseas vendors for monographs. The invoices
include the price in their currency and a conversion into U.S. dollars.
The university accounting office has begun to question some conversion
rates given by vendors. I'd like to know how this issue is dealt with by
other university acquisitions departments.
Thanks for your help.
Mary Seligman
Acquisitions Librarian
Adelphi University
Garden City, NY
Responses:
(1)------------------------------------------------------
Date: Thu, 06May 2004 08:05:37 -0500
From: Nancy E. McFaul (Univ. of Wisconsin-Eau Claire)
<MCFAULNE_at_UWEC.EDU <mailto:MCFAULNE_at_UWEC.EDU>>
Subject: Foreign currency conversion
Here in our library, we also occasionally purchase from foreign
vendors and individuals. I work in Collection Development, but I am
also a satellite unit attached to our university's Accounts Payable dept.
Recently we ordered a video from a professor in Australia, who
requested check payment in Australian dollars. This required paying
a high bank fee for the draft in Australian dollars.
My account auditor rejected that form of payment, and instead
preferred that we pay by credit card or by wire transfer. For some
reason the credit card wasn't going to work in this situation. The
wire transfer (no bank charge) was acceptable to the seller. We were
communicating with the seller by email and he replied with the
necessary bank account and address information. The conversion rate
was determined at the time of the wire transfer of funds to his bank
account in Australia. I initially estimated the conversion rate at my end,
and then made an adjustment in the payment amount on our Voyager
acquisition system when my next monthly accounting report was
published.
Nan
Nancy McFaul
McIntyre Library
Collection Development Dept
University of Wisconsin-Eau Claire
105 Garfield Ave
Eau Claire, WI 54702-5010
mcfaulne_at_uwec.edu <mailto:mcfaulne_at_uwec.edu%0B715-836-3381%0BFAX>
715-836-3381
FAX: 715-836-2949
(2)-------------------------------------------------------
Date: Thu, 06 May 2004 09:25:09 -0400
From: Art Miller (Princeton U.) <afmiller_at_PRINCETON.EDU
<mailto:afmiller_at_PRINCETON.EDU>>
Subject: Foreign currency conversion
We also deal with a great many overseas vendors. Some of them
will bill us in US dollars and some of them will bill us in their local
currency. We have never argued with the conversion rates that our
vendors quote for several reasons.
1. The extra cost in staff time when we have to enter the invoice in a
foreign currency, arrange the payment and then enter the US dollar
equivalence.
2. On average when I compare the rate they charge against the
reasonable rates that I find online they are not that far apart. I do
not use the interbank or credit card rate. I use the cash rate that is
figured at an estimate of interbank plus 4%. That is closer to what
our vendors have to pay to convert US dollars back into local
currency.
3. When we went though currency fluctuations over the years
sometimes our vendors lost money on their US dollar estimates,
but they honored them anyway. I have never been asked if we
should pay them more because the dollar moved our way.
When possible we do use our credit card. But, some of our vendors
can't accept credit cards. I also have vendors who can only be paid
in the local currency. After we figure in time, effort and extra costs
paying a vendor's estimated US dollar price is well worth it.
Arthur F. Miller
Assistant Order Librarian, Invoice Unit
Princeton University Library
Phone: 609-258-5342
FAX: 609-258-0441
(3)---------------------------------------------------------
Date: Thu, 06 May 2004 08:37:40 -0500
From: Sarah Andrews (U. of Iowa) <sarah-andrews_at_UIOWA.EDU
<mailto:sarah-andrews_at_UIOWA.EDU>>
Subject: Foreign currency conversion
Whenever possible, we ask our foreign vendors to bill us in US$. I
advise them they can charge us bank fees or conversion charges if
necessary to accept a US$ payment. We can use a credit card, but our
University has extra accounting/balancing steps required with
procurement cards, so I discourage it. We aren't using Paypal.com,
but a couple of smaller vendors have asked us to use it. We try to
mainstream payments and pay with US$ checks as much as possible,
even if we pay extra charges. We don't worry about the conversion
rates vendors charge, but I did stop using a vendor who I suspected
held invoices and materials waiting for favorable exchange rates--
sometimes for months at a time.
Sarah Andrews
Monographic Acquisitions
University of Iowa Libraries
(4)------------------------------------------------------------
Date: Thu, 06 May 2004 09:48:36 -0400
From: Katharine Farrell (Princeton U.) <kfarrell_at_PRINCETON.EDU
<mailto:kfarrell_at_PRINCETON.EDU>>
Subject: Foreign currency conversion
Dear Colleagues,
Princeton spends about 40% of its acquisitions budget outside the US
and many of our invoices list both foreign currency and the agent's
stated conversion rate for payment in US currency. Invoices that list
only foreign currency, but do not state a requirement to pay in that
currency we convert at the Cash + 4% rate as stated on one of the
online currency trader sites. We use Oanda,
http://www.oanda.com/convert/classic, as our rate source. Keep in
mind, and remind your accounting office, that billing in US currency
is a service that your vendor provides and it usually costs them in
bank charges to deposit foreign funds. We have also done several
studies here on the cost of writing an institutional cheque and the cost
of acquiring a bank draft in foreign currency. We find that it is more
economical to pay in US funds. Whenever we sample the rates used
by vendors who state a conversion rate themselves it is in the same
general range as the rate formula we use. Our University accounting
office accepts the rates we or our vendors specify. In fact, as we
transfer our payment requests electronically, the accounting office
never sees the original invoice.
You might also want to post this query to Acqnet.
Kind regards,
Katharine Treptow Farrell
(5)-------------------------------------------------------
Date: Fri, 07 May 2004 08:36:44 -0500
From: Char Klemp (U. of Wisconsin - Whitewater)
<KLEMPC_at_UWW.EDU>
Subject: Foreign currency conversion
We ask our vendors to please invoice in US$$. When they do not, I
have bookmarked the web cite: www.oanda.com/convert/classic
<http://www.oanda.com/convert/classic> and
do the conversion on the day I receive the material. This gives us the
actual cost on the day received. Have not had any problem with our
University Financial Service Department doing the exchange this way.
Look at this cite and see what you think.
Charlene Klemp
University of Wisconsin - Whitewater
Library Technical Processing
800 West Main Street
Whitewater, WI 53190
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Received on Thu May 13 2004 - 21:39:28 EDT