[consulting] How to send/receive money (was: being a listed consultant)

[Evan Leibovitch]

Khalid Baheyeldin wrote:
> In Canada, US clients can send you US cheques, and they are deposited
> in your account easily (at the ATM), and adjusted for currency exchange.
>
> No hassle, no fuss, and 10% - 12% exchange rate benefit.
Hardly "no fuss", especially from an accounting POV.

US cheques deposited in Canadian accounts are typically frozen (that is, 
it's in your account balance and may accrue interest, but you can't 
withdraw it) for between two and four weeks. The Canadian and US cheque 
clearing systems are completely different; unless you have a Canadian 
USD bank account the payment process is clumsy at best. If you have 
recurring payments from the same location (that don't bounce) AND a 
friendly bank manager, you might be able to get the freeze lifted.

I would never do an ATM deposit of a US cheque in a Canadian account 
because you really don't know how much you're depositing until well 
after the fact. What happens is one of two scenarios:

1) Regardless of what you put for a deposit, the bank applies its own 
(worst possible) exchange rate and overrides the amount you told the ATM 
you were depositing. Accountants hate this kind of adjustment.

2) The bank makes a mistake and deposits your money at par (ie, they 
deposit your $100US cheque as $100CDN), which is likely not what you 
intended and usually difficult (but not impossible) to reverse.

Trying to circumvent bank regulations (by depositing a US cheque -- that 
they would normally freeze -- into an ATM that doesn't freeze deposits) 
tends to gett red flags on one's file at the bank. Enough of those and 
you find new and fascinating restrictions on your ATM use that will 
affect *all* your deposits.

If you're outside the US and do significant international business, it's 
ALWAYS better to actually have a US dollar account -- such accounts are 
available at major banks in many countries. That way, you deposit the 
cheque directly into your USD account and _you_ choose when to incur the 
expense and benefits of currency exchange. Depending on where you are 
and what you do, some banks also offer EUR and GBP accounts --  nobody I 
know still uses CHF.

Having a bank company/branch that understands international business is 
highly recommended and can save literally days of grief and waiting. Two 
examples of banks with good international experience (and presence in 
many countries) are Citibank and HSBC. I can personally vouch for the 
skill of HSBC at international transactions.

> Virtually all couriers forbid shipping of cash explicitly. I am pretty 
> sure gold falls
> under the regulated stuff, since government does not want to make life 
> easier for
> money laundering, organized crime, ..etc.
Actually, currency, precious metals etc are accepted by Fedex, UPS, etc; 
they're referred to as "Articles of Extraordinary Value" or "Valuable 
Cargo" in the service guide. HOWEVER -- you cannot declare a value of 
more than $500, and good luck getting someone else to insure your 
shipment. IOW, it's _possible_ to do but is still, as Khalid says, a bad 
idea.

(Money laundering is dealt with by requirement to declare any shipment 
whose contents exceed some amount (I think it's $2,000) in value, 
regardless of the nature of the goods. This is also the case with 
international money wires, but the bank already does that reporting on 
your behalf whether you know it or not ...)

Shipping doesn't necessarily involve less headaches than banking ;-).

- Evan