I'm trying to setup a foreign supplier which is prepaid expense (VOIP/telephone supplier). The supplier is prepaid X amount, and then they invoice every month off the balance. I created a current account under Prepaid Expenses and allocated a bank payment into that account in a foreign currency (USD) at the exchange rate on that date. The Prepaid account is in USD, and home currency is ZAR.
Below are the issues:
1) QB doesn't allow an Expense to be captured where the source of the funds is a Prepaid Account. This doesn't make sense since its a prepaid asset account? The only option then is to do a manual journal entry but then you lose the capturing and reporting of the expense (ie. invoice) when viewing the supplier. Is there no way around this flaw?
2) The other issue is that QB doesn't use the correct exchange rate when doing the journal entry. For example, if I credit the Prepaid asset account (USD) and debit the Utilities account (ZAR) once an invoice is issued by the supplier, I would expect it to use the average exchange rate from the Prepaid asset account, but instead it tries to use the current exchange rate. The prepaid account had a set exchange rate when the USD was topped-up - and so the underlying home currency amount and exchange rate will never change unless additional top-ups are made, and then it would need to use an average. Does QB not do this, and we have to manually calculate the average exchange rate on every GL entry?