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pezza
February 15, 2019
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Multicurrency Exchange Rate

  • February 15, 2019
  • 1 reply
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Hi,

 

Just a quick question hopefully....

 

I have just set up multicurrency, as I might be starting a new contract in Belgium shortly and I believe that my invoices will be billed and paid in Euros.

 

Now, each time I raise a bill, the euros side will be fine, as I will bill in Euros and will be paid that amount of Euros, but the conversion from my business account, I suspect will differ each time, since the exchange rate will fluctuate.

 

My question is, if I set the exchange rate in the settings manually, will this affect past invoices?  By that, I mean would it go back and amend the exchange rate used in all previous invoices?  Or will this only impact new invoices/payments received?

 

Obviously, the aim is to end up where the converted (exchanged) euro payment in to Pounds matches the Pounds amount on my invoice so that everything matches up nicely :-)

 

Thanks

 

Andrew

Best answer by TaliaI

Hello Andrew,

 

Welcome back to the Community - thank you for your question!

 

If you alter the exchange rate within the settings, it will not affect any previous invoices/payments, only those going forward.

 

Please let us know if you have any further questions.

 

Thank you,

 

Talia

1 reply

T
TaliaIAnswer
February 15, 2019

Hello Andrew,

 

Welcome back to the Community - thank you for your question!

 

If you alter the exchange rate within the settings, it will not affect any previous invoices/payments, only those going forward.

 

Please let us know if you have any further questions.

 

Thank you,

 

Talia

    P
    pezzaAuthor
    February 15, 2019

    Thank you Talia. Perfect!

    P
    pezzaAuthor
    February 22, 2019

    Hi @TaliaI 

     

    Sorry to kind of resurrect this, but I've found out a little more on the process of my billing now and I am still a bit unsure how best to handle this...

     

    1. I will be billing a UK Agency, BUT I need to bill them in Euros because their client who I will be contracting for is based in Belgium and the contract rate is Euros
    2. They will pay me the Euro amount
    3. They have suggested that I set up a Euro Bank Account (which I am in the process of and have a meeting with my bank about it)
    4. I have configured the multi currency option so far, although I haven't yet set up any customer or transactions involving this currency, as I am still awaiting to find out if I have the contract!
    5. The plan will be to use the Euro Account to receive payment of my invoices and also for paying expenses that will directly involve expenses in Euros, such as accommodation etc.  I also plan to transfer money from this account over to my main (original) UK account since this is where the majority of my costs and expenses are funded from my income.  I'm not sure yet, and I am checking with my Accountant / HMRC, but I might also claim the HMRCs fixed expense allowance for Belgium too in this account/currency...depending on the advice I get back.

    So, from further reading of the FAQs I have spotted that I can add in an additional account (as an account can only have 1 currency) and I have noticed in the Chart of Accounts that all of the accounts, including my bank account lists GBP (as expected).

     

    But what I would like to know is:

     

    1. Do I have to create an additional expense account (such as Travel Expenses) so that I have 2 accounts, one for GBP and one for EU...in addition to the actual bank account?
    2. How would this affect reports such as the Profit & Loss?  I can't picture at the moment how that would include both.  Would it list both sets of amounts and how would it decide on total profit etc?  Or would it convert to GBP first for the purposes of this report.

    I am just trying to learn as much as possible on the affects of this and how I should handle things like the multiple bank accounts, different expense categories (Chart of Accounts) and reporting for people like the Tax Man :-)

     

    As I have said, I have seen some FAQ docs which I am working through but haven't spotted anything (yet) that answers the above, and would therefore appreciate any help that you, or anyone else that may have experience in dealing in multiple currencies could offer me with this.

     

    Many thanks

     

    Andrew

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