Hello @Newbie2021 ,
I do not use multi-currency nor bank feeds as I find the trouble it causes and the edits required are not worth the time; it is simply faster for me to make all the entries manually.
Regarding your US account, I handle it this way.
1. Create US Bank account - yes, this account is still technically in CAD$ but the amounts entered into this account are the US$ amounts only.
2. Create another bank account for the exchange transactions. Mine is called CAD$ Exchange on US$.
3. It is assumed you also have your regular CAD$ bank account.
Let's say you are transferring money from your Canadian Account to your US Account. The amount of US$ that you want to transfer is $10,000.00. Assuming a 1.3 exchange rate, that is going to cost you $13,000.00 $CAD.
Your entry will be something like this:
1. Write a cheque from your regular CAD$ bank account in the amount of $13,000.00
2. In the expenses section of the cheque, make entries on two lines.
3. The first line will be distributed to your US$ bank account in the amount of $10,000.00.
4. The second line will be distributed to your CAD$ Exchange on US$ bank account for $3,000.00.
This keeps the proper US$ amount in the US$ bank account so when you write cheques in US$, you can reconcile that account as though it were US$.
However, when entering bills to pay in US$, you will enter the bill twice. This is the procedure I follow:
- At the same exchange rate as what you transferred the money from your CAD$ account (in this case, 1.3), write all the equivalent CAD$ amounts beside the US$ amounts on your vendor invoice. (I use pencil so I can easily correct any mistakes).
- Enter the bill initially, using only the US$ amounts on the invoice. This is the bill that you will pay from your US$ chequing account.
- With that bill still open, create a copy of the bill. I add a small "e" at the end of the invoice number, indicating that this is the "exchange" invoice.
- Zero out the amount of the invoice.
- Move to the expense section of the bill, and using the same account distributions from the original bill, enter the difference between the converted CAD$ amount and the original US$ amounts.
- Click on Recalculate to get a new total for the exchange invoice. Save the bill.
When you go to pay the bill to a US$ vendor, select only the bills that are in the original US$ currency, leaving the "e" exchange bills for a later step. Ensure when you pay the bill it is the US$ bank account that you have selected.
Now go to pay bills again, and choose all the corresponding "e" invoices you created. Ensure you have your CAD$ exchange on US$ account selected to pay the bill from.
The balances in the two bank accounts should always represent the true amount of CAD$ that your US$ have cost you.
When I have to add more to the US$ account, I keep a spreadsheet with a running tally because once you purchase US$ for the second and subsequent purchases, the exchange rates will need to be blended to get a current rate to process current US$ vendor invoices.
The exception to this would be if you only ever transfer to your US$ account the exact amount of US$ needed for your US$ vendor invoices. In this case, then you would just use that exchange rate on those invoices and there would be no need for blending rates.
I hope this helps. Good luck!
