Contra payments in Foreign Currency - how can I explain or allocate - accounting community forum

I have a customer who I invoice in Euros. They did a small amount of work as a supplier, so I had a situation where they owed me a larger amount of money but I owed them a small amount.

For argument's sake say they owed me 10,000€ and I owed them 825€.

Using the above example figures, they paid me but contra'd off the 825€ and so I received 9175.00€.

I have handled contra's before from GBP suppliers/customers by using the quickpay function and a contra account (so the Quickpay function is definitely switched on - I have just rechecked).

However if I go to the bill for 825€ the system doesn't give me an option to QuickPay. I guess it is because the system isn't set up to allow the Quickpay on foreign currency invoices?

So how do I handle this to do "explain" the contra amount on the Euro bank import? Any ideas welcome.

Hi Paul,

I think when multi currency was first developed it was disabled on quick pay as this form would need further development to account for conversion rates. It should really be added to multi-currency invoices/bills in future, however in the mean time you can make payments for your multi currency invoices/bills using the Money>Manage money menu and linking payments to invoices like so:

https://s3-eu-west-1.amazonaws.com/uploads-eu.hipchat.com/36185/273538/tRg7ur6bdswNvZV/Screenshot_1.png

I would recommend creating the payments with the on the same dates as the invoice/bill so that there are no conversion rate differences (and therefore no write offs to forex).

The contra process would therefore just be the same as the method you have used in the past- you can create a Euro Contra account and allocate a payment to the invoice and bill from this account and then transfer the difference to your business account.

I hope that makes sense but again if you have any queries please let me know.

Contra payments in Foreign Currency - how can I explain or allocate

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