Paying for Software in Shillings or Dollars
A dollar-priced subscription is a currency position you did not intend to take, renewed monthly, with no hedge. What the shilling has actually done, why a "$45 per user" quote is not a price, and the difference between a contract currency and a display currency.
A quote of "$45 per user per month" reads like a price and behaves like a derivative. What you are agreeing to is a fixed dollar obligation funded by shilling revenue, settled monthly, for as long as you use the software — and nobody in the meeting where you approved it described it that way, because in the meeting it was converted once at that day's rate and written into a spreadsheet as a shilling figure.
That spreadsheet figure is the only version of the price that is wrong.
What the exposure actually looks like
A $200/month subscription, illustrative rates
The rates above are illustrative rather than a forecast — the point is the mechanism, not the level. The shilling has had both stable stretches and sharp moves in recent years, and the direction is not the issue: the issue is that a cost you cannot predict sits inside a budget line you are held to.
Three second-order costs nobody quotes
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The card conversion spread
A dollar charge on a shilling card is converted by your bank or card scheme at their rate plus a margin, often 2–4%. That margin is invisible because it never appears as a line item — it is simply the difference between the rate you looked up and the rate you were charged. Over a year on a $200 subscription it is meaningful money.
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Cross-border charges and their reversals
Foreign-currency card transactions attract fees, and they are also the transactions most likely to be declined by a bank's fraud rules — which means a subscription that lapses because a payment failed, at a moment nobody was watching, on a rail you cannot control.
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The budgeting cost
The subtlest one. A line item you cannot predict forces either a padded budget, which costs you the padding, or a variance every month, which costs you the explanation. Neither is large and both are permanent.
Contract currency versus display currency
This distinction is worth insisting on with any vendor, because the answer tells you where the risk actually sits and the two are routinely conflated in a sales conversation.
Contract currency
- The currency the obligation is denominated in. What you owe.
- If it is dollars, the shilling figure moves and you absorb it.
- If it is shillings, the price is the price and any dollar figure shown is decoration.
- The question: "if the shilling moves 15%, does my invoice change?" One sentence, and it settles the whole issue.
Display currency
- A convenience conversion so a figure reads sensibly to whoever is looking at it.
- Should never appear on a document that constitutes a record — an invoice, a statement, a receipt, an export.
- Ours works this way deliberately: shillings are the contract, a dollar figure is derived from a live cached rate for reference only, and no export or invoice carries it.
- The tell of a well-built system: it refuses to print the indicative currency on anything that matters.
Why the second column is stricter than it sounds
A converted figure printed on an invoice becomes a number somebody reconciles against, at a rate from a moment nobody recorded. That is how a reconciliation ends up two per cent out with no traceable cause. A system that will show you a dollar equivalent on screen and refuses to put it on a document is not being unhelpful — it is declining to create a false record.
The same problem inside your own business
If you import, you already know this. The extra cost is not the exchange rate — it is that the rate on the order date, the rate on the payment date and the rate on the day the goods clear are three different numbers, and the margin you thought you had was calculated with one of them.
Worth knowing about the tooling here: landed cost allocates by value or by quantity, and there is no FX inside it — no payment-date rate, no weighted rate across staged payments, no per-shipment variance. So the discipline is yours: record what you actually paid in shillings when you paid it, and treat the invoice-date rate as an estimate rather than a cost. What landed cost is covers the mechanics, and it is the single most useful concept for any Kenyan importer to get right.
One further constraint to plan around: the base currency is fixed per organisation. You choose it once, and a display currency is indicative on top of it. If you genuinely need two functional currencies with independent reporting, that is a group-structure question rather than a settings question — multi-currency operations works through where the boundary sits.
What to ask, and what to do
Four questions and two habits
- "Is the contract in shillings or dollars?" Not "can I pay in shillings" — the denomination, not the payment method. Paying shillings against a dollar obligation just moves the conversion.
- "If the shilling moves 15%, does my invoice change?" The one-sentence version of the same question, and harder to answer evasively.
- "Is the price fixed for the term, and what notice applies to a change?" A shilling price that can be revised quarterly is a dollar price with extra steps.
- "Will the invoice show one currency or two?" Two is a reconciliation problem waiting for whoever does your books.
- Habit: if you must take a dollar-denominated subscription, budget it at 15% above today's rate. You will either be right or pleasantly wrong.
- Habit: pay annually where a dollar price is unavoidable. It converts twelve unpredictable conversions into one, which is the only hedge available to an SME.
Our take
Prefer a shilling-denominated contract, and where you cannot get one, pay annually and budget 15% above spot. Insist on the distinction between contract currency and display currency in every quote — and treat a vendor who will print an indicative currency on an invoice as telling you something about how carefully the rest of their product was built.
Priced in shillings, converted for reference only
The contract currency is KES and it is the number you owe. A dollar figure is derived from a live rate for reading convenience and appears on no invoice, statement, receipt or export.
See plans & pricingFrequently asked questions
Why does it matter whether software is priced in shillings or dollars?
Because a dollar-denominated subscription is an unhedged monthly currency obligation funded by shilling revenue. A 20% move turns a KES 25,800 monthly cost into KES 31,000 with no notice, and the shilling figure your budget was built on was a single-day conversion that stopped being true immediately. The direction of the move is not the issue; the unpredictability inside a budget line you are held to is.
What is the difference between contract currency and display currency?
Contract currency is what you owe — the denomination of the obligation. Display currency is a convenience conversion so a figure reads sensibly on screen. The distinction is routinely blurred in sales conversations, and the one-sentence test that settles it is: if the shilling moves 15%, does my invoice change?
Should a converted figure appear on an invoice?
No. A converted figure on an invoice becomes a number somebody reconciles against, at a rate from a moment nobody recorded — which is how a reconciliation ends up two per cent out with no traceable cause. Here, the contract is in shillings and a dollar figure is derived from a live cached rate for reference only; it appears on no invoice, statement, receipt or export.
What hidden costs come with a dollar subscription?
Three. The card conversion spread, often 2–4%, which never appears as a line item and is simply the gap between the rate you looked up and the rate you were charged. Cross-border transaction fees, plus the risk of a bank fraud rule declining the payment and lapsing your subscription unnoticed. And the budgeting cost of a line item you cannot predict, which is paid either as padding or as a monthly variance.
Can we run two base currencies?
No. The base currency is fixed per organisation and chosen once; a display currency sits on top of it as an indicative conversion. If you genuinely need two functional currencies with independent reporting, that is a group-structure question rather than a settings question.
Does landed cost handle exchange rate movement?
No. Landed cost allocates by value or by quantity and contains no FX handling — no payment-date rate, no weighted rate across staged payments, no per-shipment variance. So record what you actually paid in shillings on the day you paid it, and treat any invoice-date conversion as an estimate rather than a cost.
