I create invoices for my client in US Dollars. When the clients pays back, due to the currency exchange there is always an outstanding balance showing in the monthly sales.
When I mark an invoice as paid, I tick the ‘Payment in Full’ option but still I have this outstanding every month.
Can you please help with it?
Monthly sales (if you’re referring to the monthly breakdown on the dashboard) will always report in GBP, it would therefore be expected to see some differential between your invoices and payments if you’re invoicing in foreign currencies, this would account for the currency loss/gains.
The key thing to look at is the amounts showing in the red and green section on the dashboard that will include the GBP totals of any outstanding sales and purchase invoices.
Yes, I am talking about the monthly sales that shows up on the dashboard. So, will the outstanding balance always show up when i raise invoices in foreign currency?
Thanks a lot.
When you raise invoices in a foreign currency there’s an exchange rate component so an invoice raised 2 weeks ago for USD 200 will be worth say GBP 125 (based on an ex-rate of 1.6). Now when you’re receiving a payment of USD 200 it could be worth GBP 117.65 (based on an ex-rate of 1.7).
The dashboard graphs will show this difference as all calculations are normalised to GBP. However Quick File moves any difference to a nominal code Currency Charges (7902) and adjusts it out of your debtor control account. You can see this by looking at the debtor control account (1100) and the Currency Charges account in your chart of accounts.
So in the above example that will go on your accounts as a loss of GBP 7.35, reducing your taxable profits by that amount.
So even though the dashboard graphs show a monthly balance this is not true for foreign currency invoices and you should always reference the total reflected here.
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