I’ve been having some problems reconciling purchases in a foreign currency with the bank or PayPal statements. I feel I’m getting there but I can’t still get to reconcile a purchase, for example, in $300 with the credit card statement saying I paid £240.84, and, equally another purchase for US$73.20 with my PayPal feed showing a payment for £61.39.
Can anyone guide me, please?
Thanks a lot in advance!
PayPal presents a unique problem in that you can have EUR, USD and GBP transactions all in one single account. As most accounting software will only allow transactions of one currency to be stored in a single bank account you have to normalise all the entries to that particular currency.
In the case of PayPal you need to convert any USD purchase you have there into the GBP amount on your statement, in your example this would be £61.39 and then you can tag that to a GBP purchase.
You can also manually create the purchase as $73.20 then mark that as paid from the GBP PayPal account and specify the GBP amount as £61.39 on the payment entry dialogue.
Manually creating will produce a duplicate payment entry on your bank, so you’d then need to delete the untagged duplicate that was retrieved by the feed.
Hope that makes sense!
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Thanks for your swift response, and apologies for my slow one. That’s what I’ve been doing so far, but for some reason I had the impression that that I could reconcile the bank/paypal statement in GBP with the invoice in USD. This is also to be able to calculate the correct VAT amount for the VAT return.
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It’s not possible to do this directly from the bank, so using the method I mentioned you’d need to first create the USD invoice and pay it to the PayPal account in GBP. Then just delete the duplicate bank entry that came in on the feed.
Obviously if you have many such transactions I would recommend to just post everything as GBP, you can still post the VAT correctly using that approach.
Many thanks for your support. I’ve decided to re-do the invoices in GBP, showing corresponding VAT, so that I could tag them to the purchases on the bank and PayPal statements. I was successful this time. Thanks, again.
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