Writer Earnings: The Woes and Joys of Currency Exchanges

March 19, 2010

Do currency exchanges and the exchange rate impact your writing career and livelihood?

When writers who don’t live in the USA (or who do but write for international clients) get together and talk writing rates, exchange rates are a discussion that often comes up.

Back in the day…(LOL — 2006) when I started freelance writing, I think the US dollar was close to near $1.46 to my Canadian dollar and the British Pound was somewhere near $2.45 per Canadian dollar. It was nice to get $146.00 or $245.00 per $100 or £100 when the exchange rate happened (I especially liked the £ exchange!). Some days the difference worked so well in my favour that it felt like invoice payments had bonuses thrown in!

But, over the years, things have fluctuated and I’ve lost money on more than one occasion — — especially lately. Sterling, at the time I write today, is somewhere around $1.52 CAD and the US dollar is around par. The Canadian and US Dollar like to spar it out every once in a while and in terms of running a business, it can feel a bit like playing the stock market!

Any writer who writes for affiliate marketers might actually write about the ability to make money on the foreign exchange market. An entire internet marketing business model is built around the idea of buying and selling at the right time in order to turn a profit. But when this is your livelihood, it’s not always possible to make certain you profit. Can you protect yourself?

Here are some currency-related writing business tips:

(and I’d love any additional suggestions from experienced writers, too!)

  • Grin and bear it. If you aren’t operating at bottom of the barrel prices (which you shouldn’t be), you can withstand a little bit of fluctuation. After all, sometimes it works in your favour.

  • Leave the money be. At times, the fluctuation is temporary. Leaving your money in your account, awaiting rebound, before withdrawing to your own currency might be an option. This isn’t an option if you are living hand to mouth, of course. And, it may get worse before it gets better so do your best to try to follow finances enough to have an idea of how things are expected to go.

  • Change your billing currency. I’ve been advised recently that I might want to switch to billing my clients in Canadian funds as my dollar is expected to continue to climb. But it’s not so simple. That’s telling my US customers that I’m about to charge them more money and this might not be looked at favourably by them at zero notice. Besides, things could change again and I don’t want to switch to and fro and have my clients see dealing with me as flighty. They need to be able to plan for their finances, too, and I don’t want to be difficult to do business with.

  • Quote new business in a currency that suits you based on the most favourable scenario. If a particular currency type is favourable when you quote new business, pick it. This might not always work and could work against you if the new client wants to do business on an ongoing basis, though, so decide carefully.

  • Notify your customers of an upcoming price increase. You can’t just grin and bear it if the currency you typically bill in plummets and is not your local currency. I have, in the past, approached client contracts under the understanding that pricing is reviewed every five months and increases are implemented at the six month. That way, customers have 30 days to get ready for a new price and if you skip increases at times, they feel like they’re getting value. You won’t always keep customers after an increase but if you prove yourself valuable, they might be willing to budge. And, if you’re doing marketing and self-promotion, hopefully you aren’t relying too heavily on one client’s business.

  • Open several accounts. There are ways to manage currency through foreign accounts and through merchant services that could help lower service charges and premiums (such as with PayPal, who takes a percentage of the currency exchange each time you transfer your money to another currency). If currency exchange is becoming a problem for you, do some research to find creative solutions and payment processors that may be able to help.

Currency can be tricky. Companies such as PayPal also charge service fees from specific countries so currency exchange can be an additional expense and has to be taken into account when quoting.

Sharon and I discussed this issue today and joked that writers need to be financial analysts because of the fact that many of us need to keep currency exchange in mind when quoting and be aware that exchange rates could vary between the time you quote and the time you get paid. You need to try to account for potential impact on your business’s bottom line as it fluctuates. Managing your finances carefully and ensuring you charge enough to turn a profit (despite fluctuating profit margins) will help, as will keeping an eye on the market.