Skip to main content
C
Cordelia
February 24, 2020
Question

How do I record a forex loss when the invoice was originally raised in our home currency?

  • February 24, 2020
  • 1 reply
  • 0 views
Our company has a contract with an overseas client that states we invoice in our home currency (GBP) but this is then converted into their currency at the contract rate, then converted back at the forex rate at the time of payment. So, for example, say we invoiced £100 to our client in Malaysia. The contract states the rate of 5.35 RM to the £. They convert the £100 to RM535. Then they pay, in RM, at the rate at the time of payment, say RM5.5 to the £, so we actually then receive £97.27 instead of £100. How do I record this forex loss in QB when the invoice is in GBP? Thanks in advance.

1 reply

A
Ashleigh1
February 24, 2020

Hello Cordelia, 

 

Thanks for reaching out to us on the Community page, 

 

To record the loss in Quickbooks, we would suggest you do a journal entry. One side would need to be to debtors and the customer and the other side could be an expense there is an account for gain and loss of exchange. Once the journal is done then if you go back to the customer, select receive payment select the journal this will show the difference has gone and been accounted for. However we are not trained accountants so you're best of speaking to an accountant about this. 

 

You could turn multi-currency on in Quickbooks and set the customer up with that currency they pay you in and the different exchange rate can be changed to what you have agreed upon. 

 

If there is any accountants on here, we welcome them to post how they would record this on this thread. 

 

 

 

Terms & ConditionsAccessibility statement