A customer made an overpayment and we want to record it as Exchange Gain, how can I do that?

Hi usernestor-ale Did the customer overpay you in one amount or did they overpay you by sending you two separate amounts?

HI John!

it was just one payment

Thanks for getting back to us usernestor-ale, just to check, was the overpayment an exchange gain resulting from differences in foreign currencies?

Basically, yes, but its a little bit more complicated. My question was simplified in order to get to the point faster.

Summarizing:

- We have a price list in, lets say USD, but we invoice our customer in another currency, lets say BRL.

- Our customer pays the invoice using the agreed value in USD (cant use BRL for international transfers), and when the money arrives, those USD are again converted to BRL.

- Of course, the amount of BRL received is never exactly the same as the amount of BRL in the invoice, because it depends on USD rate fluctuations. Sometimes we get less, sometimes we get more.

-When we receive a lower value, I can use the "Resolve difference" option, but when the value is higher QB creates a credit for the customer account. I want that difference to be recorded as Exchange Gain, not as credit for the customer.

Example:

- Product sold price = USD 1000 => invoice = 5000 BRL ( rate = 5 @ invoice date)

- Payment received after 60 days, with rate = 5.5, then we receive 1000*5.5 = 5500 BRL

- Thus, we have an exchange gain of 5500-5000 = 500 BRL, those 500 BRL must go to Exchange Gain or Loss account, not as credit for the customer.

Hope this helps

I appreciate the complete details you've shared, @usernestor-ale.

Enabling the multi-currency feature calculate the gains or losses on all foreign exchange automatically as well as track the exchange rate on foreign currency transactions. This is ideal especially if you frequently have multi-currency transactions. Let me share additional information on how it works. Just make sure to set up your home currency and all the other currency you're using.

Here's how to enable it:

1. Go to the Gear icon :gear:.
2. Choose Account and Settings.
3. From the Advanced menu, go to the Currency section.
4. Click Edit ✎.
5. Select your Home Currency.
6. Mark the Multicurrency checkbox and confirm that you understand that you can't undo this option.
7. Click Save and close. 

Just a heads-up, since you're subscribed to QuickBooks Online UK version, your default home currency is GBP. Once completed, you can add the currencies you're using.

1. Choose Gear icon :gear:.
2. Select Currencies.
3. Click Add currency.
4. Pick the new currency from the Add Currency ▼ drop-down menu.
5. Click Add. 

Now, you'll have to set up a bank account and assigned currency to it. This is vital especially if your customer's payments are directly posted to your bank account that is under BRL currency.

You'd have to assigned a foreign currency to your customer. This lets you record transactions in the currency they pay you with.

Lastly, you can run either the Realised Exchange Gains & Losses report and the Unrealised Exchange Gains & Losses report. These reports displays all of your foreign transactions that are closed (referred to as realised gains and losses) and totals the gains and losses due to changes in exchange rates.

As always, you can leave a comment below or start a new thread if you have any other concerns. I'll be always around ready to help. 

Thanks but not helping.

I really spend a lot of time explaining but you guys just keep providing canned answers.

Few things are very clear for me:

1- You didn't understand the process I detailed in my previous post

2- All currency and values in my previous post were examples, do I need to tell you not to take it literally? the scenario was correctly explained (long and short versions), you have all the information you need, but the answer is not helping. Please avoid wasting your time by answering questions that were not asked in the first place.

3- We already have multicurrency enabled since day 1, and our home currency is USD, we need it in that way and is working just fine for us.

4- We know how the automatic "Exchange gain/loss" works, but if you read my post carefully, you will realize this particular scenario is different: We are invoicing in BRL, but the customer is paying in USD, and our bank is converting the received dollars to BRL before making the money available in our bank accout, so, there is a exchange difference that cannot be handled by QBO because everything is happening in the "background", meaning that the only thing visible to QBO is that we issued an invoice for "XXX" BRL, but we received a payment of "YYY" BRL, where YYY is bigger than XXX. Do you agree that QBO is oblivious about the payment in USD and also oblivious about our bank converting those USD to BRL before making the deposit to our account?

5- But lets forget about all those unneeded details, and please refer to my original post, and if possible, try to give a direct answer to that simple question: "A customer made an overpayment and we want to record it as Exchange Gain, how to do that?"

Thank you