An introduction to cross-border invoicing and B2B payments

The basics of getting paid by your international customers

If international expansion is on your agenda, you’ll need a basic understanding of the complexities, challenges, and opportunities in facilitating cross-border business payments. You’ll quickly discover there’s nothing basic about it.

What are B2B cross-border payments?

Cross-border business payments are currency transactions between organizations that are located in different countries. As EY explains, these transactions involve front-end providers and, increasingly, back-end ones. In the past, the payer chose a front-end provider – a bank or money transfer service – to process the payment, which the recipient received through the provider the payer selected. Long settlement periods, high transaction costs, and limited accessibility were a problem, particularly with less liquid currencies. Within this environment, back-end networks have emerged to optimize cross-border payments and enable interoperability between different payment methods. These back-end providers give senders more options – and can deliver greater efficiencies – to reach the receiver.

What is cross-border invoicing?

Similar to domestic business payments, international B2B payments are facilitated through invoices. However, managing the complete invoice-to-cash cycle—including invoice generation, payment collection, reconciliation, and reporting—is crucial for maintaining healthy cash flow and operational efficiency. In B2B commerce, invoices do more than just detail the products and services delivered and their costs. Invoices set the terms of payment, including schedule, discounts, and applicable taxes. When the invoice is international, there are additional things to consider – what currency you are billing in, what currencies you will accept, and the preferred or required payment method. Getting invoicing right almost takes on added urgency with cross-border B2B payments because many moving parts already increase the complexity and cost of getting paid, as well as the time it takes to receive payment.

Streamlining the invoice-to-cash process

Automating the invoice-to-cash process can significantly reduce manual workloads, minimize errors, and accelerate payment cycles. By integrating invoicing, payment processing, and reconciliation into a single system, businesses can achieve greater transparency and control over their accounts receivable (A/R) operations. Some Benefits of automating the invoice-to-cash process include:

Automated invoice generation with customizable templates.

  • Real-time payment tracking and notifications
  • Seamless integration with existing ERP and accounting systems
  • Enhanced reporting and analytics for informed decision-making
Flywire cross border invoicing image 1

FX 101

The foreign exchange market is the world’s largest and most liquid financial market, with volumes exceeding those of all global equity and fixed income markets combined. Trading takes place 24 hours a day, opening Monday morning in New Zealand and closing Friday evening in the United States.

What are some complexities with sending and receiving cross-border business payments?

Taking the international invoicing process alone, there are regional, country-specific, and sometimes even local regulations and laws that guide what the invoice must look like and how it must be delivered. There are also the complexities of calculating the payment itself, including foreign exchange rates, taxes, and tariffs.

When your business is invoicing an international customer, you must consider:

  • Regional, country-specific, and local requirements, including invoice format, language, and more
  • Different currency options
  • Methods of payment (e.g., electronic, wire transfer) and what that means for compliance requirements
  • Assuring the correct documentation is sent by the payer for US tax purposes
  • How the business will receive payment in a timely and accurate manner
  • How to best avoid short pay (due to dynamic FX rates and hidden fees)
  • How cost-effective is the transaction for both parties when considering currency exchange rates
  • Transaction security and compliance with applicable security and privacy laws and regulations
  • How the transaction will be reconciled in the accounting system, including accuracy, speed, and visibility into cash flow

It’s no wonder that companies eying global expansion cite managing international payments as a significant obstacle. More than 90% of the 301 financial professionals surveyed in a recent Flywire research report indicated that their organization’s global expansion efforts could accelerate if they could find an easier way to deal with foreign exchange rates. Some 88% said the complexities of collecting cross-border payments impact their ability to grow, with a complete 40% saying it does so “significantly.”

What are some common challenges businesses face in receiving cross-border payments?

Cross-border payment processes can introduce additional costs, create cash flow challenges, and introduce inefficiencies due to limited access to payment data and insufficient transparency into the payment flow. These hurdles often impact the entire invoice-to-cash cycle, slowing down collections, delaying reconciliation, and making it harder to forecast cash flow. Here are some of the common challenges companies face:

  • Speed. Or the lack thereof, can have a huge impact on cash flow for the receiving company. It’s one reason why interoperability—the ability to pay anyone, at any time, to any account, regardless of the payment system used – is essential to increasing the speed of payments, according to research by Glenbrook and the US Faster Payments Council. Respondents say that interoperability enhances the customer experience (by making it more seamless), improves operational efficiency, reduces risk exposure, and leads to a more competitive market.
    Delays in payment settlement extend the time it takes to complete the invoice-to-cash cycle, creating bottlenecks that affect liquidity and financial planning.
  • Cost. Depending on the payment method used, additional fees may be incurred for cross-border payments. FX rates significantly impact the cost of cross-border transactions for both the payer and the receiver, especially for high-value transactions.
    These costs don’t just affect margins—they also complicate reconciliation during the invoice-to-cash process, particularly when FX fees cause discrepancies between invoiced and received amounts.
  • Transparency. A recent Visa survey revealed that 82% of banks globally view improved visibility as one of the most “appealing features of new approaches to international payments.” Today, businesses often receive a batch of international payments in a lump sum without any accompanying remittance information. This makes it very difficult to reconcile them, especially when payment amounts do not match invoice amounts due to fluctuating foreign exchange rates and fees.
    Without clear remittance data, businesses struggle to match payments to invoices,which disrupts the final stages of the invoice-to-cash process and increases the risk of errors or delayed collections.
Flywire cross border invoicing image 2

What is an FX rate?

Foreign exchange markets set the foreign exchange rate, also known as the FX rate—the ratio between two currencies that shows how much of one currency is exchanged for the other. Due to both the ebb and flow of currency demand and round-the-clock trading, FX rates fluctuate regularly.

5 steps to invoicing international customers – and getting paid on time

Getting invoicing right is the first step toward efficient, timely international payments—and a seamless invoice-to-cash process. Each step of international invoicing directly impacts how quickly and accurately you can collect, reconcile, and settle payments.

When considering how to invoice international clients, here are some key guidelines:

1. Establish the terms of sale

When writing a contract with an international customer, be sure to clarify the terms of sale for the buyer. These include cost, amount, delivery, accepted payment methods, accepted currencies, and the payment due date. Creating clear expectations around these items will help your business better manage cash flow, reduce Days Sales Outstanding (DSO), and mitigate risk throughout the invoice-to-cash cycle.

2. Determine what payment methods you will offer

Clients like options, and offering diverse payment methods can improve the likelihood of on-time payment. New payment methods are coming online every year (or now, every few months). Let’s look at some of the most relevant ones. Consider how each technique affects payment timing, reconciliation, and automation—all core parts of your invoice-to-cash strategy.

  • Credit cards — Fast but costly due to FX and processing fees.
  • ACH payments — Popular and cost-effective for recurring B2B transactions.
  • Instant/real-time payments — Improve cash flow by reducing settlement delays.
  • Digital wallets — Regional relevance makes these critical in global invoicing strategies.
  • Bank wires — Traditional but costly and difficult to reconcile.

3. Weigh whether you need to open foreign bank accounts

If most of your international payments come from one region, opening a local account might reduce fees and improve payment speed. But you’ll also need to consider the invoice-to-cash implications, such as reconciling local collections, handling foreign exchange conversions, and integrating those payments into your core accounting system.

4. Consider the importance of international invoicing functionality

Make sure your digital invoicing or ERP system supports not only the invoice creation, but the broader invoice-to-cash journey. Look for features like:

  • Multilingual and multi-currency functionality
  • Dashboards for real-time payment tracking
  • Customizable templates
    Integration with multiple global payment gateways
  • Automation for recurring invoices, payment reminders, and reconciliation workflows


These features enable faster collections, better visibility, and improved cash forecasting—key benefits of a strong invoice-to-cash process.

How can I measure the efficiency of international accounts receivable?

Many of the same KPIs and metrics already used by your accounting team apply to international accounting. But for a more complete picture, it’s helpful to assess the efficiency of your entire invoice-to-cash process, not just individual accounts receivable components.

Accounts receivable (AR) efficiency is an important measure to track, and it goes beyond Days Sales Outstanding (DSO). Several factors impact DSO, including fluctuations in sales volume and SLA compliance. You should track metrics such as:

  • Delinquent Days Sales Outstanding (DDSO) – Calculates the average difference between the invoice due date and the date paid.
  • Days Beyond Terms (DBT) – Measures how many days delinquent invoices remain unpaid.

Because both DDSO and DBT account for delinquent accounts, they are often more reliable indicators of AR and invoice-to-cash performance than DSO alone.

You should also evaluate:

  • The number of international receivables received in full and on time
    The volume of payments that require manual reconciliation or exception handling
  • The frequency of customer inquiries related to how or where to submit payments

Each of these factors signals friction in the invoice-to-cash process, and opportunities to streamline it through automation, better remittance data, or global payment options.

Flywire cross border invoicing image 3

How does the FX rate impact the transaction?

Let’s consider one way for international customers to pay and the possible effect of foreign exchange rates on the transaction. Wire transfers are an established way for global customers to pay a business. With this option, you provide payers with your business’s banking details (routing number, Swift code, IBAN, etc.) along with the invoice. This allows your international customer to input the necessary information to initiate a wire transfer.

However, there are some major drawbacks: short payments can result from intermediary fees and undisclosed foreign exchange (FX) rates being deducted from payments before the funds reach you. The fees are hidden in the transaction and often built into a marked-up exchange rate. They can cause short payments because your customer will not (and likely was not able to) have accounted for them.

What to consider in building a cross-border payments capability

Cross-border payments reached $190 trillion in 2023, with business payments accounting for the majority at $183.5 trillion, according to EY. Overall, cross-border payments are expected to reach $290 trillion by 2030.

Numbers like that beg the question for many companies: Should you build this capability internally?

You may quickly discover that you don’t want to become a payments company—or an invoice-to-cash company. Supporting cross-border transactions goes far beyond payment processing. It includes generating compliant invoices, offering localized payment options, collecting funds, reconciling transactions, and managing reporting across jurisdictions.

Cross-border payment processing falls under the legal and regulatory regimes of multiple jurisdictions, requiring businesses to navigate a matrix of licensing and compliance standards. “Licensing and oversight requirements may differ from jurisdiction to jurisdiction, especially regarding non-bank front-end and back-end providers,” according to the Bank for International Settlements.

You’ll also need to comply with global invoice-to-cash regulations, such as AML/CFT, KYC, risk mitigation, e-invoicing mandates, and consumer protection. Providers must often file periodic reports, segregate funds, and meet capital requirements.

And it’s not just legal complexity—it’s also about infrastructure. Building out international invoice-to-cash capabilities demands significant investment in:

  • Global payment gateways
  • Tax-compliant invoicing engines
  • FX handling and transparent pricing
  • Customer service support across time zones
  • ERP and A/R system integration

Each of these is essential to delivering a seamless invoice-to-cash experience, and each can quickly pull resources away from your core business.

If you need more evidence of the growing complexity, in November, the World Bank launched a database of laws and regulations across 200 countries. And emerging global frameworks—such as those improving interoperability and payment visibility—make the build path even harder to maintain in the long term.

Also consider the time, cost, and opportunity lost in building your infrastructure. Outsourcing to a specialized provider allows your team to focus on what you do best, while delivering a faster, more efficient invoice-to-cash experience for your customers.

How to improve international accounts receivable collections

We’ve given you lots to think about as you consider your international expansion. Yes, there are obstacles—but they are not insurmountable. And you don’t have to do it alone. Pick a partner with in-depth knowledge and experience to support not just payments, but the entire invoice-to-cash process.

More than 2,500 organizations in 240 countries and territories rely on Flywire’s global payment network and over a decade of experience in managing cross-border transactions. Our B2B invoice-to-cash solutions eliminate many of the operational challenges associated with international invoicing, collections, and reconciliation.

  • Extensive local market knowledge and a global payment network that enables businesses to expand into new markets easily. Diverse payment methods in over 140 currencies provide your customers with convenient, localized payment options.
  • Our significant global volume reduces payment fees and shields you and your customers from currency fluctuation, unlocking substantial cost savings.
  • We complement your existing banking and ERP systems to enhance global treasury and accounts receivable (A/R) operations.
  • Our platform’s robust regulatory and compliance infrastructure helps you navigate international complexities with confidence.
  • End-to-end invoice-to-cash automation and visibility—from invoice delivery and payment through to reconciliation—resolves cash-flow issues and streamlines collections, all while integrating seamlessly into your current workflows.
  • Our subject matter experts keep you informed on anti-money laundering, compliance, and global security requirements.
  • Multilingual customer support with localized expertise handles any payment inquiries from customers in any country.

Whether you're looking to improve DSO, reduce manual effort, or expand internationally, Flywire empowers you with the tools to accelerate your entire invoice-to-cash lifecycle.

Learn more about what Flywire can do for your international business expansion

Updated May 19, 2025