Wrong currency exchange values in the invoice

[eatcookies]

I'm doing my accounts and have just realized that I've used the wrong currency exchange rate in some of my invoices.
Shall I ignore the wrong value and use the right one? this way FX Gain/Loss will be accurate.

 

[The Byre]

AFAIK, you are supposed to write down what you actually received and not what you feel you should have received. I hope that answers your question, though I am not sure as there are all sorts of exceptions, depending on circumstances.

 

[eatcookies]

AFAIK, you are supposed to write down what you actually received and not what you feel you should have received. I hope that answers your question, though I am not sure as there are all sorts of exceptions, depending on circumstances.

Thanks, the way I understood it is, you write down the fx rate at invoice date on the invoice, then once you get paid, since the fx has changed, you're going to calculate the gain/loss difference because of that and record it as such.
So for my question, the logical way of solving this seems to be ignoring the invalid fx value on the invoice and using the correct one, this way the right amount of taxes will be paid and hmrc/society will be happy

 

[japancool]

Thanks, the way I understood it is, you write down the fx rate at invoice date on the invoice, then once you get paid, since the fx has changed, you're going to calculate the gain/loss difference because of that and record it as such.

What currency are you invoicing in?

 

[eatcookies]

What currency are you invoicing in?

Company's accounts are in GBP, and I'm invoicing EU customers in EUR

 

[The Byre]

Time to open a Euro account outside the UK and transfer sums once a month/quarter/whatever.

 

[eatcookies]

Time to open a Euro account outside the UK and transfer sums once a month/quarter/whatever.

Why outside the UK? Revolut Ltd supports multi-currency accounts (GBP, EUR and USD).
From an accounting perspective, isn't that the same thing? you calculate the fx gain/loss anyway at payment date, then the other fx gain/loss at fx date.

 

[japancool]

Company's accounts are in GBP, and I'm invoicing EU customers in EUR

Thanks, the way I understood it is, you write down the fx rate at invoice date on the invoice,

Are you saying this is something required by HMRC?

Are you referring to this?

Transactions in foreign currencies and VAT

How to create invoices for transactions in foreign currencies and convert them into pound sterling when you account for VAT.

www.gov.uk

 

[eatcookies]

Are you saying this is something required by HMRC?

Are you referring to this?

Transactions in foreign currencies and VAT

How to create invoices for transactions in foreign currencies and convert them into pound sterling when you account for VAT.

www.gov.uk

Sorry, but I forgot to mention that I'm not VAT registered

 

[japancool]

Sorry, but I forgot to mention that I'm not VAT registered

I've never seen a requirement to provide an FX rate on invoices. Can you point me to the legislation?

 

[fisicx]

I invoice overseas clients and customers in GBP and expect that amount in my bank account. It’s up to them to sort out the exchange rate and transfer fees.

 

[japancool]

I invoice overseas clients and customers in GBP and expect that amount in my bank account. It’s up to them to sort out the exchange rate and transfer fees.

I don't invoice overseas clients, but whenever I've been invoiced by an overseas supplier, they always invoice me in their currency.

 

[DontAsk]

Having a EUR account doesn't stop exchange rate movements!

I have consistently found the discrepancy de to fx rate changing is less than the fee for being paid by PayPal so I put it down as a discount or surcharge. My accountant has no problem with this.

 

[Gecko001]

I don't invoice overseas clients, but whenever I've been invoiced by an overseas supplier, they always invoice me in their currency.

I always quote in Euros for my one Eurozone client. This is what they wanted when I first started to work for them. I could have insisted on them paying me in GBP but I am a small firm and they are a bigger one and I wanted the work badly.

 

[MikeJ]

We did that too. As long as you have a decent margin and can carry the exchange risk, it's a good thing to offer. Your customer wants to know what they're paying.

RBS gave us EUR, USD and ZAR accounts.