Amazon are paying to my HKD account (in Hong Kong) but are sending payout slips in GBP.
I created an invoice to the “Amazon sales” customer, but I can’t mark this as paid, as it doesn’t allow me to enter a payment received in HKD. I tried to enter the payment as a credit to the customer, but the invoice is still marked as unpaid.
So what is the correct way of registering the payment I receive in HKD for the GBP invoice?
It’s not possible in QuickFile to directly pay a GBP invoice to a HKD (or any other foreign currency) bank account. There are 2 ways you can handle this.
Reissue the invoice in HKD, then you will be able to pay directly to the HKD account.
Pay the invoice to a special holdings bank account denominated in GBP. Then enter a “money out” entry on that holdings account and transfer the sum to the HKD account.
Personally I would go with option 1.
Thanks. if reissuing the invoice to HKD, would you use XE/quickfile exchange rate, or the exchange rate that the bank gives us?
When using XE exchange rate, then the invoice will not be marked as paid, as the amount received is less than the invoice. So if doing it this way, how’s the correct way of accounting for the money lost in bank transfer fees?
There are two exchange rate components here. The first is the rate on the invoice and the second is the rate on the payment, the difference between the two will create a currency loss/gain. You can use the suggested xe.com rate on your invoice and the rate supplied by your bank on the payment side.
Thanks. But now the invoice is not marked as paid, as a small amount is missing (exchange rate loss). How to account for this amount that was never received?
Did you receive one single payment to cover that invoice?
All you need to do is go to the invoice preview, click to manually log a payment then select the HKD account as the receiving account.
Make sure to enter the exact amount received in HKD (probably the full value of the invoice), along with the GBP equivilent.
You may need to remove any existing payments you’ve attached to that invoice first.
The payment received does not cover the whole invoice.
There are two issues: 1. They deduct a 3.5% currency exchange fee, so the HKD amount they pay out will be lower than the HKD of the invoice which is exchanged with XE exchange rate from GBP amount.
2. They don’t pay the invoice specifically, they send payments every 2 weeks, so the amounts paid will never equal exactly the monthly invoice.
How to best deal with this situation ? Thanks!
In that case you will need to setup another bank account called something like “Amazon Holdings (HKD)”. All individual invoices should be paid into this account (which represents the money Amazon are holding for you). When Amazon remit the funds you need to enter a transfer from this account to your HKD current account (assuming that’s where they are paying to). Any balance left on that merchant account tag it as a supplier payment to Amazon and log it under something like “Bank Charges”.
This process is common to all kinds of deferred payment arrangements. I recommend you consult the following guide which should provide a clearer picture.
http://help.quickfile.co.uk/main/1/accounting_for_income_from_payment_service_providers.htm