foreign currency expenses

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  • Updated 2 years ago
I am using Accounts Hosted and have a new client.   He has some travel expenses in a foreign currency relating to a business trip that I need to process.  These expenses relate to 2016 and I am not sure of how to approach processing these in regards to the currency exchange rate?  Do I just use todays exchange rate as date of processing?
Thanks in advance if anyone can give me some advice.
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Carina Gazzard

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Posted 3 years ago

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John Graetz

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Hi Carina.  If the expenses were incurred by using a credit or debit card, the value of the transaction should appear on the card statement in $A.  That in turn should be the basis of the claim.
John L G
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Tyla Skantzos

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Hello. I have a customer who has entered some expense invoices in USD. When they have been paid, they have been paid in AUD and large amounts of 'foreign exchange' has been coded in the system. How can I correct this??? 
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John Graetz

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Hi Tyla.  The simplest way would be to change the coding from "foreign exchange" to whatever account the original transaction was coded to for the $US value.  Then the whole value will sit where it belongs.  Either change the original recording if it is still in the current BAS reporting period, or if there are other reasons why this is not appropriate, you will need to process journal entries to clear the "foreign exchange" portion of the real cost and offset to the appropriate account to which the original value was charged.
John L G.
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Tyla Skantzos

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Thank you. Not sure why it is doing this. The Vendor is setup as USD and invoices setup as USD. Paid in AUD from our bank. How can I change the settings so that the GL shows the correct rates? I was thinking of changing is to AUD to avoid it continuing to happen. the rate is set at 1.388 so 72% of the cost gets expensed and the balance goes to Exchange Gain/Loss. We are not talking a few dollars. :) Do you know how I can fix it???

Thank you so much for your prompt reply.
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John G, Information Support Analyst

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Hello Tyler, Carina & John,

You are experiencing a normal phenomenon associated with processing foreign currency denominated transactions and reporting in your home currency (AUD).  

The amount being posted to Exchange Gain/Loss is the value of the difference in the exchange rates used (sometimes only indicative rates) between the day the Bill was entered and the day the Bill was paid.  Where you have foreign currency bank accounts, Accounts Receivable and Accounts Payable, you may also get from time to time the AUD value being out of line with the foreign currency balance.  

The simplest solution with Bills is to use the same exchange rate on entry and payment transactions.

A full explanation and responses available to you is available in this KB

Hope this helps.