Tagging non-GBP transactions

Tagging non-GBP transactions can be tricky as they will sometimes include other elements such as exchange or bank fees. There’s also the added complication if the invoice is in a different currency compared to the payment.

QuickFile operates with a base currency of GBP, so reports are presented in GBP. You can find out more in our Invoicing in foreign currencies guide, which also covers tagging a non-GBP invoice.

Non-GBP Invoice with GBP payment

With many businesses transacting overseas, it’s not uncommon to have an invoice in a different currency to the one you paid.

Let’s use an example where we have an invoice which is $100.00, and we paid £85.00. When tagging the transaction from your bank account, you won’t be able to find the invoice in the first instance. But it’s easy to resolve.

  1. Tag the invoice as normal. In this example, we have a payment out of £85.00 to a supplier, so we select Payment to a Supplier

  2. We then see that no matching purchase invoices were found, as it’s $100.00 rather than £85.00. Just simply click the Match to a different currency invoice option and select your currency

  3. We can select the currency to search for and the flexibility in the exchange rate:

  4. Select the invoice as normal and you’re done!

GBP invoice with non-GBP payment

You may have a client who pays in a different currency than the one you invoice in. We’ll keep it simple by using the same figures from above. We’ve issued a £85.00 invoice, and the client pays us $100.00.

The chances are, these funds are converted to your bank account currency (e.g. GBP), but you may be missing a little bit due to exchange rates or banking fees.

Possibility 1: The amount is different due to exchange rates

We were expecting £85.00, but due to the fluctuations in exchange rates, we’ve actually received £82.00; £3.00 short.

In this situation you can either:

  1. Request that the client pays the additional amount
  2. Or to avoid complications with your client, you may write off the difference by raising a credit note

This will reduce the balance of the invoice and you can then tag the payment received to the invoice directly.

Possibility 2: The amount is different due to bank fees

Depending on your bank, you may be charged an exchange fee, so the resulting amount is different despite the client sending the correct amount.

Technically, this is two transactions - one for the invoice amount and one for the exchange fee.

Your bank statement will likely show that this is just a money in transaction of £82.00

Using a holding account

To ensure your bank statement on QuickFile is accurate, you may wish to use a holding account.

This is a dummy bank account that only exists in QuickFile and acts as an intermediary between transactions.

In this case, you would use this dummy account to manage this payment.

The Holding Account
The holding account would consist of 3 transactions:

  1. The payment for the invoice (£85.00)
  2. The currency exchange fee (£3.00)
  3. The amount received in the bank (£82.00)

Your Current Account
This consists of just one transaction - £82.00. This should match your bank statement and everything is tagged and done!

Non-GBP payment for a different non-GBP invoice

QuickFile needs a GBP transaction to aid with calculating fluctuations in bank transactions, so everything has a base value in GBP (even non-GBP transactions - these show as GBP on your reports).

When you receive a non-GBP payment for a non-GBP invoice, it can seem a little complicated. But by using a holding account, this keeps things tidy and simple.

Your holding account is just a dummy bank account that only exists in QuickFile. It should be in GBP.

As both the transaction and the invoice are in different currencies, and both non-GBP, you’ll need to create a step between - this is where your holding account comes in.

Let’s use an example where we have an invoice for €1,500.00 and the client pays in USD - $1,485.00.

You would tag your “money in” to your USD current account as a transfer from your GBP holding account. That’s all you need to do for your USD current account. When you tag the transfer, you’ll be asked to enter a GBP value.

In your holding account, you then have 2 transactions:

  1. Your transfer from the current account (with the GBP value you just entered), and
  2. A new transaction for the same GBP amount, tagged as a payment to your client’s invoice (see above for details on how to tag this).

Everything should balance and it’s all recorded nicely.

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