Trouble matching transactions when invoicing in different currency

neutraltone

Hi there,

I’ve been using wave for a while now and I am overwhelmed by how such a fantastic piece of software can free but I have a little gripe with the software which I can’t seem to figure out how to fix.

I’m UK based so I work with GBP but I have a few clients in the USA which means I will invoice them in USD. My issue comes when the invoice has been issued and the client has paid the money directly into my bank account which is also linked to wave. The money which arrives into my account doesn’t match the currency conversion that wave has done automatically via XE, this is because my bank uses a different exchange rate. I can’t figure out how to adjust the amount received to easily match the invoice with imported transaction to balance the books. Can anyone offer some advice on how to get this to work for me? Cheers.

Alexia

Hi, @neutraltone.

You can't match an invoice to a payment in a different currency in Wave. My recommendation would be to create a Payment asset account called Undeposited Funds that uses USD as its currency and record your USD invoice payments to that account.

Once you receive your payment move the money from that account to your bank account in Wave, and create another transaction to account for adjustments due to exchange rates so that the amount received matches the amount on your bank statement. You can categorize those transactions to Gain/Loss on Foreign Exchange.

neutraltone

thanks @Alexia, this all kind of makes sense, I'm just having a little bit of difficulty understanding how to represent that money being transferred out of the new USD account and matching that with the transaction which has been imported into my other account in wave automatically from my bank account.

Is there perhaps a guide that would explain this process in a little more detail?

Alexia

Hi, @neutraltone.

Wave has limited support for businesses that operate in multiple currencies, so it's always a bit more work. We're working in features to make this easier, but they aren't quite done yet. In the meantime, it's a bit more work.

In your case, you'll have to delete the transactions imported from your bank connection and handle the whole process manually. Your transactions will look like this:

• Income to your Undeposited Funds accounts for the amount of the invoice.
• Create an expense to your Undeposited Funds account for the same amount, categorize it as "Transfer to a bank, credit card or loan" and choose the bank account where the money was deposited.
• Create an expense transaction for the difference between the amount transferred to your bank account in your own currency, and the actual amount that was deposited.

pingo

Hello. I'd like to know if this is still the recommended procedure for such cases or is there another way by now?

AlexL

Hey @pingo . This flow still works. Alternatively, you can recreate the invoice in the currency that was deposited into your bank and match it that way. Those would be your two options.

pingo

Hey @AlexL thanks for letting me know.

Yes it would be more simple to change the invoice's currency to match the bank deposit currency but unfortunately EU laws and thus also Ireland regulations state that if VAT invoice is not in home currency it must show both foreign currency and home currency which is something that wave seems not to support.

VAT invoice requirements are listed here: https://www.revenue.ie/en/vat/vat-records-invoices-and-credit-notes/invoices/what-information-is-required-on-a-vat-invoice.aspx