UK Exchange rate and bank fees

[kevin richard]

Hello everyone,

I need some help for input something in sage( I'm working in England)

For example : My company do an invoice of 2 000$ to an other company and at the date of the invoice 2 000$ = 1 800£.

The customer pay my company 2 000$, my bank take 50$ of fees, and at the date of the payment 1950 $ = 1 820£.

So thanks to the evolution of the value of the £, my company win more than expected.

Could you explain me how to input in sage this payment? Same question if my company lose money because of the evolution of the £.

Kevin

 

[Snorbenz]

Set up an account in the profit and loss called "Exchange gain and loss" and debit or credit your differences in there when they occur.

 

[kevin richard]

Hello Snorbenz,

Currently, the person in charge of the accountancy do that. But if you do that, you don't record the bank fees ( in the bank statement, the payment amount is 1950 $).

If you record the bank fees, could you show me how you write the all accounting entry?

Best regards,

Kevin Richard

 

[Triest123]

My company do an invoice of 2 000$ to an other company and at the date of the invoice 2 000$ = 1 800£.

.... Dr Account Receivable (2,000$ x @ 0.9) 1,800£
Cr Sales 1,800£
To record the sale on credit at the exchange rate 1$ = 0.9£

The customer pay my company 2 000$, my bank take 50$ of fees, and at the date of the payment 1950 $ = 1 820£.

Dr Bank (1,950$ x @0.9333) 1,820£
Dr Bank charge (50$ x @0.9333) 46.67£
Cr Account receivable (2000$ x @0.9) 1,800£
Cr Exchange gain 66.67£
To record the cash received from the customer,
bank charge and the gain on exchange upon
receiving the foreign money.

 

[kevin richard]

Hello Triest123,

Thank you for your answer. Could you give me more information please : do you record 1820 or 1800 as bank receipts? Do you put the bank charge and the exchange gain in the bank journal?

Best regards,

Kevin Richard

 

[Triest123]

Hello Triest123,

Thank you for your answer. Could you give me more information please : do you record 1820 or 1800 as bank receipts? Do you put the bank charge and the exchange gain in the bank journal?

Best regards,

Kevin Richard

=> The amount credited to your bank account (i.e. 1820) is the bank receipts.

Yes, the bank charge and the exchange gain are put in the bank journal

 

[kevin richard]

Ok but the customer account isn't balanced so?

 

[Triest123]

Ok but the customer account isn't balanced so?

=> You should make an accounting entry to record the
credit sales at the date of the invoice 2 000$ = 1 800£ !!!!!!!