I understand there is no way to deal with foreign currency bank accounts and the various transactions in the version of Sage my potential new client has, apart from to convert all transactions.
Is the correct way to do this to convert the payment / receipt at the transaction date back to sterling using Bank of England or other appropriate conversion rates? A seperate spreadsheet can be kept to keep details of the transaction amounts in the foreign currency and the sterling equivalent. The converted rates in sterling would then be entered into Sage in the normal manner.
However, this means that if there are several transactions in a month the balance at month end on the bank statement will also need to be converted using the exchange rate as at that date. How is this dealt with? Is it correct to deal with as follows;
Work out the expected balance at the end of the month Work out the converted balance at the end of the month. Post the difference using journals in Sage, ie. dr bank, cr profit/loss on exchange rate (or whatever you would call this account) or vice versa depending on whether the conversion is higher or lower.
