Hi, I am doing book-keeping for a new client. Sage. They have dollar and sterling bank accounts and an exchage rate variance a/c nominal 7906. Previously when POA have been made to a dollar invoiced customer- paid in sterling the procedure is thus; Create invoice to Debtor A/C Stop gap with nomonal code 7906 amount POA Receive BP to sterling from stop gap debtor amount POA
Create credit note with n/code 7906 to dollar customer with N/code 7906 POA amount.
if the invoice is in dollar- the payment on account recoreded in sales ledger must be in dollars, otherwise will be hard to know how much of the remaining invoice value, the USD customer owes
no need to put in stop gap invoices.
money received in pounds- do two journals
(1) Journal the receipt in GBP account.
Dr GBP current account gbp value. Cr 7906 gbp value
(2) Journal the deposit in the customer's USD account in the sales ledger.
Cr USD value (USD:GBP rate to tie in value in gbp in 1st journal) Dr 7906 USD value
beware of hidden bank charges if customer origionally paid in dollars and the bank converted the money into sterling, if that is the case you need to book bank charge seperatly.
