Paying a supplier invoice in a foreign currency using UKForex - how do I get this into my system to match the bank transaction??

Question asked by Paul Barnes 9 years ago

I have 2 foreign currency accounts - US Dollars & Euros - as well as my GBP account. I end up with a surplus of Euros (I buy in GBP to sell to EU and so get paid in Euros). I also have shipping costs in US Dollars and receive invoices from my freight forwarder in USD. Instead of doing 2 FX's and transferring EUR>GBP and then GBP>USD, I use UKForex to make the payment. So I agree a transaction with UKForex (sell them Euros and "buy" USD) - but... Here is an example: I have an invoice for USD 11536 from my supplier. I make a deal online at UKForex to sell them EUR 9805 and buy $11536 but to make the payment to the supplier's bank account. I make a payment of 9805€ to UKForex from my Euro account - so that is showing as cash out on my bank and my import tool is asking to explain. They pay the $11536 direct to the freight forwarder (my supplier) so there is no record in my accounts.

What am I left with: An "unexplained" payment of 9805€ out of my Euro account An invoice $11536 (entered as a bill in USD) that is sitting as a creditor amount

The payment paid the invoice but how do I enter this in Clearbooks?

I have tried doing it via a contra account type set up but it actually overwrites the invoice with different values (which seems to be an error which I will flag separately to clearbooks).

Any ideas anyone?

Paul

Write reply9

9 Replies

HI Paul

Just tested this and it does indeed work correctly without having to post via a contra a/c of any sort.

Scenario: USD bill of 11536 unpaid with EUR 9805 to be taken from the EUR bank a/c for payment.

Go to Purchases > Money Out and enter as follows:

file

Press confirm and you'll be taken through to the allocate screen:

file

You will see in this example Clear Books has converted the original USD 11536 to £7546.47 (bill dated 01/06) and today's EUR payment to £7072.74. There is therefore a 'difference' of £473.73. This is because the rate you've managed to gain by using UKForex is better than the one indictated by XE.com (which is where Clear Books is linked into for rates).

Allocate the £7072.74 payment against the £7546.47 bill.

You then need to click back into the bill:

file

Scroll to the bottom and hit options:

file

Scroll down again and click the FX button:

file

Scroll down a final time and click FX Write Off:

file

The outstanding £473.73 will then be written off to a special P&L expense account called Forex Movement which is standard procedure:

file

Best answer
9 years ago

It's early...

You're looking to pay a USD invoices using EUR?

9 years ago

Yes in short!

But the fx has already been agreed so the bill needs to show as paid in full irrespective of what rate clearbooks uses.

9 years ago

How about this:

Create a contra account in USD.

Treat the EUR 9805 out as a transfer to the USD contra account.

Do a money out from the USD account to settle the invoice.

Annoying that EUR can't be used to correctly pay a USD invoice, needs to be reported if that's the case.

9 years ago

HI Paul

Just tested this and it does indeed work correctly without having to post via a contra a/c of any sort.

Scenario: USD bill of 11536 unpaid with EUR 9805 to be taken from the EUR bank a/c for payment.

Go to Purchases > Money Out and enter as follows:

file

Press confirm and you'll be taken through to the allocate screen:

file

You will see in this example Clear Books has converted the original USD 11536 to £7546.47 (bill dated 01/06) and today's EUR payment to £7072.74. There is therefore a 'difference' of £473.73. This is because the rate you've managed to gain by using UKForex is better than the one indictated by XE.com (which is where Clear Books is linked into for rates).

Allocate the £7072.74 payment against the £7546.47 bill.

You then need to click back into the bill:

file

Scroll to the bottom and hit options:

file

Scroll down again and click the FX button:

file

Scroll down a final time and click FX Write Off:

file

The outstanding £473.73 will then be written off to a special P&L expense account called Forex Movement which is standard procedure:

file

Best answer
9 years ago

Many thanks Kevin - I really appreciate the time you put into this.

I used a contra style approach for my old transaction but it will happen again this month so I'll use your method.

Thanks again

9 years ago

This is quite old. But I'm hoping someone replies. What do you do if the amount you end up paying is more than what was recorded on the system? It will create a credit and would be harder to write off. What do I do in this instance?

6 years ago

Hi Zeinab,

Would this be for a multicurrency bill?

Tommy

6 years ago

Hi Tommy Yes, it is. it was billed in USD and paid in pounds. But due to the exchange rate, we paid more than was originally forecasted by Clearbooks,

6 years ago

Hi Zeinab,

Are you able to email your account name and the bill number into contact support so I can take a look please?

Tommy

6 years ago

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