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I have someone who wants me to work on their books who deal in multi currencies through PAYPALL.
They are an online company who sell a theme to people in the USA and EUR and GB.
They are based in UK but have 3 sperate paypall accounts for the different transactions.
Because of this they get paid in the currency of the country the sale was made in. Every now and again they transfer the funds from each of the paypall accounts into their GBP paypall account or british bank.
Does anyone have any idea where I can find information on how I would record these type of transactions in the normal accounts ect.
Many thanks for your help
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- Fellow PM.Dip
- Practice Licence
- 258 posts
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Hi Aaron,
Which accounts package are you using? A lot of accounting packages have a multi-currency function that allow you to record these transactions in the appropriate currency but will ask you for an exchange rate so that it can record these transactions in GBP in the accounts.
In the bank list of the accounts package you can set-up GBP, Euro and USD accounts to represent the accounts that the company has. When you transfer funds between the accounts it will again ask you for an exchange rate.
Hope this helps!
Edited at 17 Feb 2012 08:11 AM GMT
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- Member PM.Dip
- Practice Licence
- 115 posts
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I've had problems downloading a client's paypal account into their software, it turned out not every transaction was being downloaded. Not sure what the problem was but I suspect it was probably their accounting software.
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- Fellow PM.Dip
- Practice Licence
- 117 posts
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Xero can handle multiple currencies from Paypal. http://www.xero.com/
It's not cheap however.
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- Fellow PM.Dip
- Practice Licence
- 117 posts
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Aaron, i found a useful thread about this on the UK business forum, Kashflow was mentioned as dealing with this well and also clearbooks.
http://www.ukbusinessforums.co.uk/forums/showthread.php?t=215884
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Many thanks for all your replies. I would have replied before but forgot to tick the box that says "Receive e-mail notifications", so many apologies.
I am using SAGE Instant for their books as it is a simple business. I have noted there is a multi currecy conversion in there.
I will soon however be moving over to QUICKBOOKS very soon.
I am able to enter a coversion to GBP but as the money sits in that account in some cases for months when it gets converted the value maybie different (Due to exchange rates) when they actuly cash the transaction. I assume in this situation I would:
1. Set up a different bank account for each currency type
2. Record the SALE at the excahnge rate at the time sale made eg $1.5 = £1. Record the £1 in the sales account and £1 in the paypall USA bank account.
3. When the payment is transfeerd or actuly cashed and lets say the exchange rate was $1.5 = £1.05 (IE: The sale is worth 5p more than when originaly sold due to the change in rates). This is where I get a little stumed at how I should account for the 5p
Should I be opening up an account that records PROFITS / LOSSES when payments are transfered?
This person accepts the payments in the coutries currency and holds it their paypall account in somecases for MONTHS before they transfer some of teh funds to the UK paypall account/UK bank account.
Many Thanks agin for your advice.
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Lady Msaid:
“Hi Aaron,
Which accounts package are you using? A lot of accounting packages have a multi-currency function that allow you to record these transactions in the appropriate currency but will ask you for an exchange rate so that it can record these transactions in GBP in the accounts.
In the bank list of the accounts package you can set-up GBP, Euro and USD accounts to represent the accounts that the company has. When you transfer funds between the accounts it will again ask you for an exchange rate.
Hope this helps!
Edited at 17 Feb 2012 08:11 AM GMT”
Many thanks for your reply. I think im getting the hang of this.
I am using SAGE Instant for their books as it is a simple business. I have noted there is a multi currecy conversion in there. I will soon however be moving over to QUICKBOOKS very soon.
I am able to enter a coversion to GBP but as the money sits in that account in some cases for months when it gets converted the value maybie different (Due to exchange rates) when they actuly cash the transaction. I assume in this situation I would:
1. Set up a different bank account for each currency type 2. Record the SALE at the excahnge rate at the time sale made eg $1.5 = £1. Record the £1 in the sales account and £1 in the paypall USA bank account. 3. When the payment is transfeerd or actuly cashed and lets say the exchange rate was $1.5 = £1.05 (IE: The sale is worth 5p more than when originaly sold due to the change in rates). This is where I get a little stumed at how I should account for the 5p Should I be opening up an account that records PROFITS / LOSSES when payments are transfered?
This person accepts the payments in the coutries currency and holds it their paypall account in somecases for MONTHS before they transfer some of teh funds to the UK paypall account/UK bank account.
Many Thanks agin for your advice.
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- Member
- Practice Licence
- 124 posts
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Aaron Lilleysaid:
“Should I be opening up an account that records PROFITS / LOSSES when payments are transfered?”
Yes - accounts packages that have built-in multi-currency features probably have the code in there already, but you can insert one manually. You just need to insert a nominal code labelled something like "foreign exchange gains/losses". Differences go in there.
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Danyasaid:
“Aaron Lilleysaid:
“Should I be opening up an account that records PROFITS / LOSSES when payments are transfered?”
Yes - accounts packages that have built-in multi-currency features probably have the code in there already, but you can insert one manually. You just need to insert a nominal code labelled something like "foreign exchange gains/losses". Differences go in there.”
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Aaron Lilleysaid:
“Danyasaid:
“Aaron Lilleysaid:
“Should I be opening up an account that records PROFITS / LOSSES when payments are transfered?”
Yes - accounts packages that have built-in multi-currency features probably have the code in there already, but you can insert one manually. You just need to insert a nominal code labelled something like "foreign exchange gains/losses". Differences go in there.”
”
Many thanks for that. Its been a big help. I think I will get some sleep now lol. Thanks again
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- Fellow PM.Dip
- Practice Licence
- 117 posts
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Aaron, you should also look out for Paypal fees, I think the fee is taken by paypal before the payment hits the account. You would need to record the sale gross of the fees.
Also, if VAT registered, you will need to use HMRC's rates for doing the VAT return. I'm afraid I haven't done this for many years so would need to look at the website, there used to be a fax number to poll for official rates.
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