Questions on creating an invoice and exchange rate fluctuations

Question asked by Maria Ingold 10 years ago

A few questions on creating an invoice 1) Is the Account set to Revenue? This is a normal invoice payment from a client. 2) If an invoice is to a company not based in the UK do I set Exclude from VAT Return? 3) If I had created an Invoice in GBP, then the client paid in a foreign currency and the exchange came in at a difference of +£100 into the Bank Current Account, how do I show / catalogue the £100 of exchange rate fluctuation?

Thank you!

Kindest regards, Maria

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2 Replies

  1. The account will be set to whatever you either default the particular customer to when creating them or by changing the account dropdown when creating the invoice.
  2. Goods, services or digital services? Business or consumer? EU or rest of world? It's a complex area - take a look here to kick things off https://www.gov.uk/vat-how-to-work-out-your-place-of-supply-of-services
  3. If you invoice say GBP 100, but you only receive GBP 95 onto your bank account because of the way the exchange rate has panned out, you can either chase your client for the GBP 5 that's technically still owed or write it off to the P&L. Points 7-9 on this link are what you need https://www.clearbooks.co.uk/support/guides/multi-currency-2/allocate-a-receipt-to-a-multi-currency-invoice-forex-losses/
Best answer
10 years ago

Thaks again. I'll see what I can make of that! This is all historical right now so i'm currently replicating what the former accountants did at the time.

10 years ago

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