Hi,
I invoiced a client in £, but they paid me from their USD account into my £ account. This has meant an “overpayment” has been received (due to currency fluctuation).
How do I reallocate this to “gain on currency exchange” instead of showing as a prepayment or credit on the client account?
Thanks
De-tag the payment, and then instead of tagging it as “payment from a customer” tag it as a bank transfer from a spare bank account like your director’s loan or drawings. Then log the original GBP invoice as paid into the same DL/drawings account. At this point the invoice is fully paid up and the client is not showing an overpayment. Now manually create another money in transaction on the same DL/drawings account for the difference between the invoice value and the amount you received, to return the DL balance back to where it should be, and tag that as “something not on the list” to the currency charges nominal account (which is where it would have gone had the invoice been in USD).
Great, thanks for that. Much appreciated.
Seems a little long-winded, but I guess that’s the only way.
Yeah, if the invoice were denominated in USD then the cross-currency payment would handle the gain automatically.
If you wanted to tag it all up without using your DL as a holding account then you’d have to raise an invoice against the customer for the amount of the currency gain, which would probably cause more problems than it solves if they were to look at their client dashboard and see that you’d “charged” them more than they had agreed to.