We're just getting used to Xero accounting software at Oaksys Tech Ltd. We switched over from an ancient copy of Sage 50 in preparation for the new HMRC (UK tax) rules on electronic tax reporting. It was our accountant's suggestion and we cannot thank him enough, accounts are so much easier on Xero. As a consequence we are getting a much better understanding of our expenditure and income. One of the big bugbears is handling credit card bills for foreign exchange transactions and reconciling them against the original bills (in foreign currency). The conversion rates used by the banks never seem to match published Forex rates, and we have to add adjustments when reconciling the credit card statements against bills.
It has finally dawned on us that the reconciliation differences are bank fees for forex transactions embedded in the the credit card statement lines. Dohh! Probably every accounts clerk knows this but we didn't. So now we burrow into the detail of the "printed" credit card statement and record those fees as bank charge adjustments. They are not split out automatically when Xero loads an electronic feed from the bank.
If we have been working overseas on a project, staying in hotels and travelling a lot, all the bank fees start to represent a significant cost. It either comes out of our profit or we pass it on to our clients.
We have found an alternative approach to this issue. It eliminates those unwanted bank charges. We use a debit card which does not charge fees for inter-currency transactions. Foreign exchange takes place at inter-bank rates. You can chose to pre-buy currency, or just use the rate at the time of transaction. The card is from Revolut.com It works in a wide range of currencies and provides a feed to Xero.
Post a Comment
We automatically delete any SPAM comments. All comments are subject to moderation before publishing. Any SPAM is individually reported to Google as such, this reduces the offending site's Google Ranking.