invoice in foreign currency and difference on payment due to exchange rate
I invoice my clients in their local currency. I convert the amount into sterling on the invoice for tax purpose only.
My clients pay in their local currency through Paypal. I convert it into sterling the day I receive the payment. Paypal's exchange rate is usually less advantageous than the one used on my invoice. Can I account this difference same as an expense for my accounting? Thanks for your replies.
- Yes, profits or losses on exchange should be accounted for in the records and shown in the Profit & Loss account