Sometimes I get paid via PayPal in USD on my GBP PayPal account.
Paypal takes away a fee in USD straight away.
When I am sending the money to my GBP bank account, PayPal applies an exchange rate which is not the official one so I am being charged some more money there.
My accountant said that I can claim those fees as “bank fees”.
So let’s imagine I am being paid $100, I can see how much that translates to GBP following the official rate of that day. Let’s imagine the official rate is 1.2 so $100 = £83.3
If at the end of the process I see £73 appearing on my GBP bank account, I can claim £10.3 as “bank fees”.
The above is clear to me. My question for the community is: what is the easiest way to do this in Quickbook? Ideally I’d like Quickbook to do all the math for me of course.
Hello Tony, why do you mention Quickbook ? mistake ? You want to say Quickfile I hope !!!
You can tag these type of expenses directly as a bank transaction in your GBP account without invoicing. I think nominal “7902 Currency Charges” would be more appropriate for these Paypal conversion fees.
Of course I meant quickfile! Not sure why I typed quickbook!
I think you might have misunderstood my message. While I could do the math and tag the bank charges as expense, I’d like Quickfile to do the math for me as I see it has multi-currency available.
What I am hoping quickfile allows me to do is to
Add an invoice of $100
Add a payment of £73
Quickfile does all the math (based on Xe exchange rate of the day I was paid) and tells me how much “banking fee” I paid which can then be logged appropriately.
It would be cool if it could at least highlight what’s the difference between $100 and £73 in pounds so I can just log that manually.
The way this works in QuickFile is that you create a (sale or purchase) invoice of $100, QuickFile converts that to GBP at the xe exchange rate for the invoice date, and that’s the GBP amount that goes on the relevant P&L nominal codes. For the sake of example let’s say that was £70.
When you come to log payment you mark the $100 invoice as paid in full and tell QuickFile that the payment amount was £73. QuickFile works out the difference between the £73 you paid and the £70 GBP value of the invoice, and automatically puts that difference as a gain or loss on the “currency charges” P&L nominal - a £3 loss in this example.
