Hello, I am UK registered research stage company. My default accounting currency is GBP eg for HMRC etc. My funding is from US investors in USD. Some of my purchases are invoiced and paid in GBP. Some (often larger ones are invoiced and paid in USD My sole income /funding is paid in tranches of USD by US investors. I keep these USD in a USD account until needed. I pay USD invoices out of the USD account and intermittently transfer some USD to my GBP account to maintain a float to pay invoices in GBP. I am switching to QF. Until now I ran two sets of accounts one in USD and one in GBP. To account for transfers eg of 1000USD I would create an entry named transferred to GBP account in the USD account and enter 1000USD. I would then create an entry in the GBP account for the amount I received from the currency transaction -say - 930.34GBP. I cannot figure out how do work with QF. Am I better to run entirely separate accounts with no connection calling on CompanyUSD account and the other CompanyGBP account. If so what nominal coding do I attach to the money transferred out ofan account and what nominal coding do I use for the money transferred into the other account. Ideally I would like to have one overall account (Company Account) which included both the USD current account and the GBP account. I tried setting this up in QF but may not be doing it correctly as I dont see how to handle the transfer eg 1000USD going out the the USD account and appearing in the GBP account as a different amount eg 930.27GBP for example. The other problem I run into when having the two current accounts in one overall account is that while they currency is correctly shown in some reports in other reports such as when getting an overall balance the balances are simply summed as though they were the same currency eg if I have a balance of 1000GBP in the GBP current account and 1000USD in the USD current account I show and overall balance of of 2000GBP which is clearly wrong. Please note I don’t want to have a currency correction applied I just want to have a report that says my final balance is 1000GBP plus 1000USD. Sorry for such a long message. Please advise me how to proceed.
Hello @drmmcd
To account for transfers eg of 1000USD I would create an entry named transferred to GBP account in the USD account and enter 1000USD.
I would then create an entry in the GBP account for the amount I received from the currency transaction -say - 930.34GBP.
I cannot figure out how do work with QF.
You would not record it on both accounts.
You record the Money out transaction in the Dollar account and then click Tag Me.
You can then select Bank transfer between accounts, enter the amount received in GBP and save as show in the example below
The other problem I run into when having the two current accounts in one overall account is that while they currency is correctly shown in some reports in other reports such as when getting an overall balance the balances are simply summed as though they were the same currency eg if I have a balance of 1000GBP in the GBP current account and 1000USD in the USD current account I show and overall balance of of 2000GBP which is clearly wrong.
As QuickFile operates UK accounts only, everything is recorded (or converted ) in GBP.
The banking screen and invoice screens would show your the alternate currency but most reports (Profit and loss, balance sheet and chart of accounts) would all show in GBP
In particular, when you record a bank transfer as described above the USD account will show 1000 US dollars as the amount going out in the bank statement view, but if you look at the backing nominal account from the chart of accounts the credit amount on there will not be the current value of $1000 in GBP but rather the GBP amount you entered as being transferred to the GBP account (probably worse than the official exchange rate if it involves bank charges).
Conversely if you raise a USD invoice or make/receive a USD payment in the USD account, the GBP amount recorded in the nominal ledger will be the USD amount converted to GBP at the xe.com exchange rate for the date of the transaction.
The different conversion rates used for different things mean that over time the balance sheet GBP value of the USD account will drift away from the “actual” value of the USD balance if you were to convert it to GBP at that day’s rate, so every so often (and definitely at your year end) you need to use the “record a currency loss/gain” tool on the USD bank account settings to re-value the USD balance at the current exchange rate. When you do this the difference will go to the “currency charges” nominal and appear on your P&L.
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