Hi - I have a client who purchases from Spain and Germany. The invoices arrive in euros and I have been advised to put them onto Sage in sterling, converting using the rate in force at the invoice date. So far so good....however, when I come to pay the invoice, having purchased my euros online, the amount I pay is invariably different from the invoice. So I am left with a creditor balance either negative or positive, the difference being the loss/gain regarding the currency purchase. I have come up with two different ways of dealing with this...firstly, to put a dummy credit note/invoice on to the supplier account for the balance after payment, coded to the currency loss/gain code and secondly to pay the creditor in full in the first instance and then do a bank payment/receipt for the difference relating to the currency gain/loss. Can anyone tell me if there is a recognised method out there?
Personally I use the first method you mentioned.....I do a credit note or an invoice, depending on whether it is a loss or gain to the exchange rate difference account. Not sure if there is a recognised method, but someone else may know
I have a client who has to pay in USD sometimes and I was advised by the accountant to do it the first method and I have set up in sage an 'exchange rate variance' code in the 79xx range. Either post and inv or credit to that code to clear the difference.
