Hi everyone. I have seen a prospective new client today and found out that he deals witha few companies in Germany and invoices and gets paid in Euros quite a bit. The business is not VAT registered so I don't have to worry about that side of things, but I have never dealt with foreign transactions before and I am a little nervous. I may not win him but would like to find out more anyway. Can anyone recommend a good study text or very good book that I could get hold of to brush up on foreign transactions? I have done some research on the internet but would just like to have a point of reference to hand.
You may not have much to worry about. I have clients that invoice in euros, but because they get paid directly into their UK bank account, the money arrives in sterling. I normally give each invoice an approximate value in sterling and then adjust it to the amount received against it when it gets paid. This way I don't have to do any revaluations or worry about currency variations.
If the money stayed in euros, then it would be more complicated. as you would have to do revaluations to take into account currency variations.
Thank you Frauke. I have just been reading up on SSAP20/FRS23 and it did sound very complicated with having to adjust the variations in P & L, although I think I got the bare bones of it, I am just lacking a bit in confidence as I have never done it before ! Your way sounds much simpler and as long as the money comes into the account in Sterling then I think that is the way I would go every time. Makes me feel much better..
