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stuartrussellald
Mar 12, 2019 1:36 AM UTC
Solved

I invoice a customer in their currency, then they pay in my home currency. How do I process the payment, account for exchange gain/loss, and reconcile my bank statement?

I have a US customer that I invoiced USD253 (CAD 354).  When they paid me it arrived in my CAD bank account converted to CAD320 (USD 233).  I want to mark the payment as fully clearing the original USD 253 amount and record the difference as an exchange gain/loss.

    arkvalleyinfoAnswer
    Mar 12, 2019 1:36 AM UTC

    I don't use QBO, but in the Desktop software you do the following:

    Record the payment as USD253, payment in full (I assume the $20 difference is a bank charge) at the exchange rate 1.26482 (320 / 253) and deposit to your CAD bank.  This will record full payment of the invoice in USD, deposit of CAD320, and the exchange loss of CAD$34.  Technically the USD$20 is a bank charge (about CAD$25.30) and the actual exchange loss is $8.70, but for all practical purposes this distinction is not important and not worth the extra work to record it.

    Try it.

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    12 replies

    arkvalleyinfoAnswer
    Mar 12, 2019 1:36 AM UTC

    I don't use QBO, but in the Desktop software you do the following:

    Record the payment as USD253, payment in full (I assume the $20 difference is a bank charge) at the exchange rate 1.26482 (320 / 253) and deposit to your CAD bank.  This will record full payment of the invoice in USD, deposit of CAD320, and the exchange loss of CAD$34.  Technically the USD$20 is a bank charge (about CAD$25.30) and the actual exchange loss is $8.70, but for all practical purposes this distinction is not important and not worth the extra work to record it.

    Try it.

      stuartrussellaldAuthor
      Mar 12, 2019 1:36 AM UTC
      This worked great, many thanks!  I'm not too worried about separating out the bank charge fee, I can live with that in ex rate loss account.  Appreciate your help.
      Roger-L
      Mar 12, 2019 1:36 AM UTC

      if you don't have one, create a 'clearing bank' in CAD currency, type cash on hand
      when you receive the payment of 253.00, deposit it to the clearing bank
         using an exchange of 320/233 = 1.3734

      your clearing bank should now have 352.07
      create a journal entry to
        db chequing account = 320.00
        db service charges 20 * 1.3734 = 27.47
        db exch g/l = 4.60
        cr clearing bank = 352.07


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