Invoicing in foreign currencies

Introduction

QuickFile provides full support for multi-currency sales invoicing, purchase invoicing and banking. You can easily raise invoices in over 100 different currencies and QuickFile will automatically track your gains and losses using real-time exchange rate data.

How can I setup Multi-Currency Invoicing?

By default the multi-currency tools are switched off. You can easily activate them from the ‘account settings’ area in your QuickFile account.

From the multi-currency settings screen you can nominate which foreign currencies you will be invoicing in. If you need to add more later you can always return here to update your settings, the idea is we don’t make you pick from long lists every time you want to raise a new invoice, showing instead only the currencies that you use on a regular basis.

All exchange rate data within QuickFile is currently supplied by xe.com. xe.com are a leading provider of foreign currency exchange rates.

That’s all you need to do to prepare your account for multi-currency!

Raising a Foreign Currency Sales Invoice

Ok now it’s time to start raising some foreign currency invoices.

We’ll start by preparing an invoice in the usual way. With the multi-currency switched on you will notice a currency button above your invoice items that will highlight your invoicing currency. Click on this button to change your currency selection.

In this example we will raise an invoice in Euros. As we select the currency, a box will appear where you can enter the exchange rate. The box will be pre filled based on the issue date, if the issue date is changed, QuickFile will grab the historical rate for you.

Once the invoice has been saved and sent to your client, QuickFile will automatically track the loss or gain based on the real-time exchange rate.

Here is a brief explanation of how the currency variations are calculated.

Unrealised Loss/Gain

The unrealised loss or gain is a dynamic figure that will change on a day to day basis and is calculated on the unpaid balance of the invoice. 100 Euros in GBP sterling on the day we raised the invoice will likely be different to it’s GBP value 2 weeks later. This box gives us a glimpse of what the invoice is currently worth in our native currency.

Realised Loss/Gain

Once an invoice is paid, the unrealised loss or gain is crystallised based on the exchange rate at the time the payment was made. The net loss or gain shows the realised and any unrealised loss or gain combined.

Foreign Currency Purchases

Foreign currency purchase invoices work in the same way as sales invoices. The loss or gains made on each foreign purchase invoice will also be tracked, albeit inversely to the sales invoices. You can raise a foreign currency purchase invoice by clicking on the ‘Log a Purchase’ button on your dashboard. The green currency bubble will appear on the new purchase form as long as the multi-currency settings have been switched on.

Foreign Currency Bank Accounts

In addition to multi-currency invoicing QuickFile will allow you to create foreign bank accounts. With the multi-currency switched on, click the button to add a new bank account from the bank management screen. You will now see an option to set the currency.

Paying Foreign Currency Invoices

One of the most versatile features in QuickFile is the ability to pay foreign invoices into a GBP sterling bank account. While previewing your foreign currency invoice, click the button ‘Log Payment’. By selecting a GBP bank account you will have the option to enter the exact GBP amount you received following the currency conversion. The precise exchange rate is calculated and once the payment is saved any loss/gain is crystallised based on the sterling amount received.

Bank Tagging on Foreign Bank Accounts

You can tag foreign bank transactions in the same way you would with a GBP Sterling bank account. All sales and purchases transacted on the foreign account can be tagged and the corresponding foreign invoices will be created on the fly. Please note however that some tagging features are not available on foreign accounts, these include tax payments, salary, dividends and bulk bank transfers. You can however tag miscellaneous items by posting to any nominal account, the GBP sterling amounts are calculated on the fly using historical exchange rate data from XE.com.

Journal out a currency loss/gain in a foreign bank account

Over time a foreign currency bank account will accrue a loss or gain due to fluctuations in the exchange rate between your bank account currency and your native currency. At any given time you can see the value of a foreign currency bank account in your native currency from the Chart of Accounts area (make sure to select the “All time” range).

At a particular juncture in your accounts (e.g. your year-end) you may want to adjust the balance of the foreign currency account as expressed in your native currency using a special type of journal for currency movements. You can access this dedicated tool in your bank management area by clicking to view the Settings of the bank account in question, you should then see a link “Record currency loss/gain movement”.

The journal will consist of two lines allowing you to move the balance from the bank account to code 7902 (Currency Charges). QuickFile will automatically calculate your accrued loss or gains at the current time.

When committed, the balance as expressed in the foreign currency will be unaffected but the native currency value (visible in your Chart of Accounts and general ledgers) will be adjusted by the amount specified.