USD invoice paid from EUR account (no USD or GBP accounts)

[Magne_Lauritzen]

Hi everyone,

I’ve just started using Quickfile to do accounting and I have already hit a bit of a snag. See the following screenshot:

My situation is as follows:

• I have only one account: Wise EUR
• I received an invoice denominated in USD
• I paid the invoice from my EUR account and let my bank do the currency conversion
• Now I’m trying to add this invoice to Quickfile

Quickfile does not let me pick my EUR account, and it even asks for how much GBP left my bank account although I don’t even have a GBP account. What’s going on?

[QFSteve]

Hello @Magne_Lauritzen

You would need to use a middle account to deal with this situation please see this similar post:

Pay USD invoice with EUR account

I don’t actually issue invoices in more than one currency, so a bit blind here… however, may be worth looking at this: Slightly different, but may be able to help?

@post:3

We don’t support foreign currency payments allocated to another foreign currency invoice. You would need to use a GBP account as a proxy, i.e. transfer the funds from the EUR account to a GBP holding account, then pay the USD invoice from those funds.

I hope this helps.

[Magne_Lauritzen]

Steve,
Am I understandinging you correctly that

1. Quickfile only supports paying foreign currency invoices in the same currency or GBP?
2. Your recommendation is that I set up a completely new GBP bank account and transfer my company funds there just for the purpose of paying non-EUR invoices?

I hope I have misunderstood something. Perhaps you instead mean I create a synthetic GBP account just in Quickbooks.

[ian_roberts]

@Magne_Lauritzen

Perhaps you instead mean I create a synthetic GBP account just in Quickbooks.

That’s the idea - you would need a GBP denominated “merchant” account in the QuickFile banking section. Tag the money out of your EUR account as a bank transfer to the GBP merchant account and let QuickFile convert to GBP; make a note of the GBP amount. Then mark the USD purchase as paid from the same GBP merchant account and enter the GBP amount as the same value as went in from the EUR transfer.

All the underlying accounting records in the QuickFile nominal ledgers are always GBP, so there has to be some notion of a GBP equivalent for every foreign currency transaction.

[Magne_Lauritzen]

Thank you Ian, that’s a great explanation.

What a tedious task, though. Why won’t Quickfile accept that some companies don’t have GBP accounts? In my case for example, I never receive or issue any GBP-denominated invoices because I deal only with foreign clients and suppliers.

[ian_roberts]

There has to be a GBP equivalent for every transaction since for any UK based business your accounts and tax returns have to report everything in GBP. I guess it would be theoretically possible for them to allow foreign to foreign payments but there would still have to be some way to assign a GBP value to the transaction, and would that be the exchange rate for the currency of the payment or the currency of the invoice (or some kind of average of the two)?

[Magne_Lauritzen]

I naïvely assumed that Quickfile would use the exchange rate of the currency used to actually make the payment (EUR in my particular case in this thread) to calculate the GBP value. But as this is my first foray into accounting, I’m certain there are complexities I am unaware of.

For now I will just have to make a ‘fake’ transfer from my EUR account into a dummy GBP merchant account for every single historical invoice I have paid. Going forward, I might choose to transfer my company’s funds into a GBP-denominated bank account to avoid this extra hassle.