Hello. If I use a foreign exchange company to execute some of my payments to foreign vendors, and technically my payment is to the FX company (who then remits my foreign currency to my desired destination), do I have to process the transaction in my accounting package as though the Fx company is the vendor, or is it correct to still show the desired vendor and simply have the mismatch occur at the bank recon level?
The FX company is just like using your bank, but instead of asking your bank to make the FX transaction, you are asking them to do it. (When you do a FX transaction through your bank, they will often do it via other banks, which you have no knowledge of. This is because if they transfer money to another bank account in another country it has to go via a bank they have an agreement with in the other country who will then pay it to the final bank!) In your case you know who its going through.
-- Edited by YLB-HO on Friday 30th of December 2011 02:28:07 PM
Would 100% agree with Frauke, as we use Travelex for all our USD payments to suppliers and have always shown these as the supplier payments in accounts.
We carefully make notes on software and on actual invoices to show these were paid using Travelex deal No........ so they can all be traced/linked and our accountants agree this is the normal parctice.
