Receipt for a foreign currency invoice - manual transaction

If you've issued an invoice in a foreign currency, your customer should of course pay you for that!

But at the moment, you'll need to enter that receipt into FreeAgent in your business's main currency, so £ sterling for our UK users.  At the moment FreeAgent can't support multi-currency banking.

So how do you enter the money in £ sterling?

If you're manually entering your bank transactions (i.e. you're not uploading them from online banking or using an automatic bank feed), then you'll see on your bank statement how much you've been paid in £ sterling.  When you're entering the invoice receipt, if you choose an invoice that you sent in a foreign currency, FreeAgent will include the usual Credit Value box for the £ sterling amount and you need to make sure that the amount of your manual payment matches the amount on your bank statement.

FreeAgent also tells you underneath the £ sterling Credit Value box how much this would be if your customer paid you using today's exchange rate.

It also adds another box for the foreign currency value of this receipt.

In this box, you need to put what the equivalent value in the foreign currency was.

Full or part payment for the invoice?

So if your customer has paid you in full for the invoice, just put in the same amount in the foreign currency as you issued the invoice for.  FreeAgent will fill this in automatically.

If your customer has paid you in part, then you'd need to check with your customer how much he/she was paying you in the foreign currency.  Your customer would need to tell you, for example, "I'm paying you €50", and that'd be the figure you'd put in the foreign currency box.

What about any bank charges or commission deducted?

If your customer is paying you net of any charges or commission, then you'd need to split the sterling amount, but don't adjust the foreign currency amount.  This is so that FreeAgent will mark the right amount of the invoice as paid.

What if the exchange rate has changed since I issued the invoice?

A realized currency gain or loss crystallizes on this invoice once it's fully or partly paid.