Currency Conversion Rate is not correct
jwareconsultingfirm
Member Posts: 1
Hi all! My currency for the business is set to Tanzanian Shillings, but some projects are actually charged in US dollars. At the bottom of my invoice there is an automated currency conversion (Currency conversion: Sh562,864.72 (TZS) at 2251.4588905164) but this rate does not reflect the true exchange rate in town. Is there a way to change this conversion/exchange rate?
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Hi @jwareconsultingfirm.
Wave automatically picks up the mid-market exchange rate as published on xe.com on the date of the transaction.
If you can give me the date of the transaction you're working with, we can check what the rate was on that day and see if we can make sense of what happened.
Hello.
I have a similiar issues with my currency. My currency (XCD) rate is tied (fixed) to the USD, meaning our rate doesn't change on a daily basis.
Our rates are as follows:
Cheque /Wire Buy: 2.6882
Cash Buy: 2.67
Sell Rate: 2.7169
Mid rate: 2.70255
Is there an option in Wave Accounting to set a fixed rate that doesn't change?
Hi, @JayDev758.
No, there isn't currently a way to set your own exchange rate in Wave. It will always match the current mid-market rate for xe.com.
In your situation, you might have to create adjustment transactions to make your amounts match up with what appears in your bank account.
Thank you for the information. I was able to adjust the rate when invoicing members. For instance, if I charge in USD for an item and the customer pays in XCD, I was able to set the rate for the specific bill and payment.
Regards
JC
When I pay for a transaction online, the bank changes me an exchange rate that is not the same as xe.com. This is when I upload a receipt, so I can't adjust my amount to be different from my receipt.When paying for a bigger service, this can add up to a huge difference from what I actually paid to what Wave notes down. How should I reconcile this? This makes a difference for when I am reporting for my taxes every year!
Hi, @yenlyng,
I recommend creating an asset account using the "Money in transit" account type to adjust those amounts before they make it to your bank account. Here's what's you'll have to do:
If you run into issues with this process, let me know. I'd be happy to help out
.
Hey @philip456 ! It looks like there's no text to your post here -- let me know if you have a question that I can assist with!
Hi
I have a similiar issues with my currency. My currency (ZWL [used to be ZWD]) rate is not tied (fixed) to the USD, meaning our rate does change on a daily basis. And can vary widely depending on how the currency is purchased.
Is there an option or upcoming development in Wave Accounting to set a fixed rate? Or to add a currency that is not on the system.
Now completely screwed up accounting as our (non-) currency ZWL has no rate or reference for international trade outside of Zimbabwe. (It's not an official currency,. Don't ask, it's a long and painful story.) The xe.com rates for ZWD is so completely ancient it doesn't help at all! In fact the ZWD was removed from circulation/dissolved in 2009.
So please, please, please can we have a "Custom" currency that we can define?
Thanks.
Hi @drg + @wildmercury . Currently, there are no plans on our roadmap to add a custom currency to the system. It sounds like the situation you're both in with ZWL is very specific, which is why we encourage feedback on this sort of stuff so we have a better idea of what features our users would benefit from.
@wildmercury & @alexlewiszarkos. Thanks for the response. The money in transit option allows to put the rate in and i think i will need to explore this a little more.. Would be good if wave would allow custom currency rates to be adopted. We have toyed with the idea of running two separate wave business accounts for each of the currencies, but the difficulty really is that the XE rate for the ZWD is obsolete.
@drg & @alexlewiszarkos. Understand. The Money-in-Transit option just seems to add risk of a mis-file or even worse a difficult to trace error. For me the easiest solution would be similar to what you have for bills, where you can enter the rate on the day of transaction. I'm doing that for local expenses at the moment, it's just local invoices are currently completely irreconcilable. Using XE.com rate from over 10 years ago is just not valid.
@AlexL @Alexia
Account Transactions
I think the solution for the ZWL issue is not so much a custom currency as it is a custom exchange rate for Accounting Transactions. As it stands Wave already allows you to input a custom exchange rate on sales invoice payments and bills. The requirement to make Wave ZWL friendly and incredibly flexible is to add the custom exchange rate to the Accounting transactions page where a user can input custom exchange rates for income(deposits) and payments (withdrawals),
Below is a screenshot of how this could look like:
Whenever a foreign currency Account is chosen for a deposit or withdrawal, the UI should add an exchange rate field with a source. That way, if XE.com has the wrong rate a user can simply select a custom source and input the exchange rate manually. In this case countries like Zimbabwe won't need a custom crrency, they'll instead input a custom exchange rate for the existing ZWD. This already works well for sales invoice payments and bills
Journal Transactions
With custom exchange rates available for account transactions, It'll leave one place where we will need custom exchange rates... Journal Transactions. This would allow someone to transfer money from the Foreign Currency Account to their Local Currency while ensuring that the transaction still balances and they can use the all powerful Custom Exchange rate: See this topic for details on the problem: https://community.waveapps.com/discussion/3178/accounting-foreign-exchange-conversions-between-accounts-in-wave.
I have created the following suggested solution in the screenshot below:
The same logic as before will apply where as soon as one of the journal accounts selected is denominated in a foreign currency Wave will automatically provide a custom exchange rate field (for each forex based debit or credit account that is selected) for the user to determine the exchange rate. Here is the tricky bit... using the a custom exchange rate, the user will input the foreign currency value the account is sending out (ZWD 31,204.00) and wave will use the inputted exchange rate (156.02) to determine the real value of the transfer in local currency (USD200.00) and use that to balance the transaction. This could even work for a transfer between two foreign currency accounts. Wave will simply balance the transaction on the basis of the value of both amounts in the local currency as calculated using the custom exchange rate for each foreign currency account. With the addition of these 2 basic features, Wave will become SUPER POWERFUL and fully compliant with the famous ZWL and any other complicated currency. It will also allow Wave to become extremely accurate when dealing with Foreign Currency. As it stands, using foreign currency in Account Transactions will leave the user with an approximate account balance.
In short, wherever WAVE automatically uses the XE exchange rate there should be a UI element where the user can determine the exchange rate themselves. The above 2 features would allow that.
I'll be happy to clarify what I posted here.
Hey @Tafmak . This is a mighty fine explanation you've given along with these screenshots which you've clearly designed yourself. I can't personally comment on how this would work when it comes to reporting as well as typical accounting standards, but I'd be happy to pass this onto the team as feedback!
@AlexL + Wave Team
For the love of everything @Tafmak is doing free developer work by giving you a well designed use case.
This shouldn't be hard for the talented team that is reflected in the software. Please do it!!!!
@AlexL, I suspect the Foreign Exchange Gains and Losses on Transactions Account can tidy up everything in the backend,
I do hope this post gains traction and positive attention. I'm battling with the ZWL currency as well given its reporting vastly inflated figures.
I would like to support the function of being able to manually change the exchange rate on any transaction that involves a currency that is not in the business currency.
In my business, I frequently autopay for services in a foreign currency using PayPal.
It appears that they use a conversion rate different to XE rate.
One of the great features in the current version of Wave is that in foreign currency accounts each transaction amount is shown in the business currency and the foreign currency.
However, the figures don't correctly match up because the exchange rates in the transactions aren't correct.
This is an area of Wave that is a cause of frustration because it's not possible to easily reflect the exchange rates that were applied to transactions.
Please make it possible to manually change exchanges rates on any transactions with currencies other than the standard business currency.
It would make life so much easier if it was possible to manually change exchange rates transactions.
Correct me if I'm wrong, but wasn't is possible to do this in the previous version of Wave?
@AlexL @JamieD
Chucking my hat in the ring...the issue for me seems to stem from the date that the FoEx is being pulled from when taking any corrective actions.
When I enter a journal transaction to correct the loss on the actual date that the loss (and clearing transaction) occurred in the real world, it applies different FoEx rate and I end up with an irreconcilable balance on the foreign account. But if I move the journal entry to the same date as the original foreign currency credit, the balances resolve to zero as I need them to.
My scenario:
Local currency is UK - GBP.
Transactions are occurring between a PayPal (USD) a/c >>> Main Co Bank UK (GBP) account.
So, to correct this I setup a journal transaction to resolve the FoEx loss as follows:
So loss is being calculated as THEN value minus NOW value; but journal entry is using the NOW rate/value with no means to adjust for the actual rate.
So after some playing around I found if I change the date on the correcting journal transaction to be the same as the original income credited into the USD account (i.e. 19th Aug) this results in USD account balance of $0.00 USD (£0.00 GBP) - exactly what I need the it to be. And the loss is listed as £2.62 on FoEx Losses account as it needs to be (albeit with the wrong date associated).
It resolves the issue on the balance reports and the P&L like I need it to, but then reconciliation is out the window.
The above solutions offered by @Tafmak would be the ideal solution long term.
Is there an option just to turn off the conversion?
Hi @Philemond , welcome to the Community! I'm afraid there's not currently an option to turn off the conversion rate, but thank you for sharing this idea here. We're working to improve how foreign currency works in Wave as we speak, and this concern is addressed in our next update! Learn more here: https://community.waveapps.com/discussion/7837/coming-soon-transactions-page-for-mobile-and-tablet-quick-edit-features-and-more/p1
OKAY HERE IS MY PROBLEM I BUY AND SELL PHONES AND GADGET. I BUY HERE IN THE UNITED STATE AND SELL TO NIGERIA. THEY PAY ME NAIRA INTO MY ACCOUNT IN NIGERIA. SO WHEN I CREAT E THE OTHER ACCOUNT IN WAVE AND RECORD HOW MUCH IS BEEN DEPOSITED FOR EACH SALES ITS OVER INFLATED WAVE EXCHANGE BACK TO DOLLAR AT 386 OR SO AND I EXCHANGE MY NAIRA TO DOLLAR AT 425NAIRA/ $ CURRENTLY SO HOW DO I ADJUST THIS TO NOT LOOK AS IF MY REPORTS ARENT RIGHT
Hey there @emmanu19
Presently, Wave pulls daily foreign exchange rates from xe.com, so that means that your rates can change quite regularly. We don't have the ability at this time to manually change foreign exchange rates, however this is a feature we are hoping to implement in the future.
It is imperative to add the feature to allow custom exchange rates.
Basing it on one source is very limiting, and gives incorrect reports. Hope you fix this soon.
Hey @JSF,
As it turns out, you can now enter custom exchange rates when entering payments made for Bills and Invoices! When you're ready to record a payment directly on the invoice/bill, click Record a payment, select the account, and then you can change the rate at which the currency has been exchanged, to ensure the transaction accurately reflects the actual payment