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Forex question

Question asked by Chippy Coates 4 years ago

I Have invoiced a client in Euros and received more than the amount due to Exchange rate change, when I allocate the receipt which is more than the invoice amount it creates an unallocated payment, any help on how I should manage this?

3 Replies

Hi Chippy Coates

Kevin has it spot on but it looks like you've used the "Allocate" button on the invoice which takes you to the "unallocated cash" system, designed primarily for payments in advance. This is actually the method suggested in CB's guide (link below) but is really fiddly and involves you creating a dummy invoice for the foreign exchange profit and thus allocating the payment against both.

https://www.clearbooks.co.uk/support/guides/multi-currency-2/allocate-a-receipt-to-a-multi-currency-invoice-forex-gains/

Far easier to either explain the payment from the imported bank statement or, if you can't wait for that, creating your own one line bank statement by using the "Money in" option next to the bank account. Either will enable you to use Kevin's method above.

Whilst I'm on, if you ever get a FOREX loss, you can use the same method but you enter a negative sum for the exchange loss first, in the transactions box, which will then provide the sum needed to pay off the invoice.

I'm guessing you've been paid in GBP then? If so, it should look like this:

file

I invoiced EU1000 which converted to £736.49

I then received £750. £736.49 gets allocated against the invoice with the balance going to a P&L code called Forex Movements.

Hi Chippy Coates

Kevin has it spot on but it looks like you've used the "Allocate" button on the invoice which takes you to the "unallocated cash" system, designed primarily for payments in advance. This is actually the method suggested in CB's guide (link below) but is really fiddly and involves you creating a dummy invoice for the foreign exchange profit and thus allocating the payment against both.

https://www.clearbooks.co.uk/support/guides/multi-currency-2/allocate-a-receipt-to-a-multi-currency-invoice-forex-gains/

Far easier to either explain the payment from the imported bank statement or, if you can't wait for that, creating your own one line bank statement by using the "Money in" option next to the bank account. Either will enable you to use Kevin's method above.

Whilst I'm on, if you ever get a FOREX loss, you can use the same method but you enter a negative sum for the exchange loss first, in the transactions box, which will then provide the sum needed to pay off the invoice.

^^^ Good spot Paul. I was originally going to link to the guidance but read how long winded it was so thought i'd explain it the easy way.

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