Enter the Bill in Wave by going to Purchases>Bills. Your business cards arrived in the mail, and included the invoice for $150 CAD. You ordered new business cards from a vendor you met while you were doing research on your trip to Canada to write the guide for Maple Tours. The difference is automatically recorded as a loss on foreign exchange expense by Wave. You expected to do ~$7,600.00 USD in work, which is what you recorded on the invoice but when it was all said and done, you got paid and the total converted to $7,356.29. In the case of this invoice, the value of the Canadian dollar fluctuated during the time between when you sent the invoice to Maple Tours, and the the time that you actually exchanged currency. To merge, click on the checkboxes beside the two transactions and then the merge icon at the top of the page. If the bank connection has imported these transactions, record the payment on the invoice, and then merge the manual payment and the bank import. Foreign currency invoices cannot be marked as paid from the Transactions page. You'll always need to record foreign currency payments directly on the invoice. When you're ready to record a payment on the invoice, select the account, and make sure to record the effective rate at which the currency has been exchanged to ensure the payment reflects what you receive at the bank. In any case where you're receiving a payment from a client in another currency, you'll need to complete the payment deposit at your bank so you know how much currency is actually exchanged. When your bank deposited their payment to your account, the Canadian dollar had strengthened against the US Dollar. Maple Tours turned out to be a good client, and sent you a bank payment within the agreed upon 30 day due date. If you look at your balance sheet, you’ll see an entry in the Unrealized Gain or Loss on foreign exchange account depending on whether the current conversion rate of the currency is more or less favorable than the day that you raised the invoice. When you approve the invoice, it’s bookkept to reflect the expected currency conversion rate on the date that the invoice was raised. When you anticipate that you’ll be exchanging a foreign currency at a future date, like receiving payment for an invoice, Wave keeps track of the fluctuation in the exchange rates for you. This approximation is called the Unrealized Gain or Loss. You can choose the currency of an invoice by using the currency drop-down menu next to the Total amount on the Invoice. When you use Wave Invoices, Wave will calculate the exchange rate approximation for you automatically. Your base accounting currency is US Dollars (USD), which are worth more than Canadian dollar on this day. You completed the work by the end of February, and on March 1st, you invoice your client the agreed fee of $10,000 CAD. You agreed to a fixed fee in Canadian dollars (CAD). Let’s say, you signed a contract with Maple Tours, to write a travel guide to the USA for visitors from Canada. This could happen because you suffer a bad debt or because you invoiced in a foreign currency, and the value of that currency relative to your business currency changed between when you created your invoice and when you received payment, or when you got a bill and when you pay it. Wave uses the accrual method of accounting, which means that income and expenses are recognized at the time they are incurred not when money changes hands. If your business issues invoices or makes purchases in a foreign currency, Wave will automatically keep track of how these values convert to your business currency to keep your bookkeeping accurate.
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