Foreign Currency Refund Accounting

We have a situation where we paid for flights in Euro but WISE banking did not have enough funds in our Euro account so sold GBP to purchase Euros and subsequently payment in the equivalent (converted) GBP showed in our GBP account with WISE rather than in our Euro Account.

We have now received a refund from the airline because the flights were cancelled by them but the refund is in Euros and has been credited to our Euro account.

I am unable to reconcile the Euro refund with the original purchase invoices as these are in GBP.

How am I able to account for these refunds?

Many Thanks.

Edward.

Since you’ve actually received the refund you could just record it as an “ad hoc” credit note rather than one linked to the original invoice - create a purchase manually, in Euros, with a negative value. When you save the negative purchase you choose the bank account to receive the refund. This will likely create a duplicate money in transaction on the Euro bank account but you can delete the untagged one from the feed so things still balance.

If this kind of thing happens again (where you buy something in one currency but pay for it in another), the better way to record it would be to still do the purchase record in Euros, then assign the GBP payment to that EUR purchase. This more accurately matches what actually happened, and if you do subsequently get a refund you’ll have the original purchase in its correct currency to match.

Hello Ian,
Thank you. This has really helped and will allow me to account for the refund.
Best Wishes,
Edward