Foreign-currency payments and exchange gains or losses
When you invoice a customer in a currency other than your organisation's functional currency (the currency your books are kept in), the exchange rate can move between the day you issue the invoice and the day you are paid. Sales Scribe handles this for you: when you allocate the payment, it works out the small realised exchange gain or loss that the rate movement caused and posts it automatically.
You do not have to calculate anything — but it helps to understand what the figure on your accounts represents.
Before you begin
- Your organisation has one functional currency, chosen when it was created. All your reports are shown in it.
- To trade in another currency you need Realised FX Gain and Realised FX Loss accounts set under Settings → Accounting. Sales Scribe fills these in for you where it can; if they are missing it will ask you to set them and will not post until they are.
Why a gain or loss arises
A foreign-currency invoice is locked to an exchange rate when it is issued. That fixes how much the sale is worth in your home currency, and that figure never changes afterwards.
When the customer pays, the money you receive is converted at the rate on the payment date. If that rate is different from the invoice's locked rate, the home-currency value of what you received won't exactly match the home-currency value you originally recorded. That difference is a realised exchange gain or loss:
- rate moved in your favour → a realised FX gain;
- rate moved against you → a realised FX loss.
It is called realised because it only becomes real once the money actually changes hands (when you allocate the payment).
A worked example
Suppose your functional currency is GBP and you invoice a customer in euros.
- On 1 March you issue an invoice for €1,000. That day €1 = £0.85, so Sales Scribe records the sale as £850 owed to you. This value is now locked to the invoice.
- On 1 May the customer pays the full €1,000. By then €1 = £0.88, so the money you receive is worth £880.
- You originally booked £850 of debt, but the receipt is worth £880 — £30 more. Sales Scribe records a realised FX gain of £30 automatically.
If instead the euro had weakened to €1 = £0.82 by 1 May, the €1,000 would be worth only £820 — £30 less than the £850 booked — and Sales Scribe would record a realised FX loss of £30.
Either way, the €1,000 invoice is fully cleared; the gain or loss simply accounts for the currency movement so your books balance.
Where you see it while allocating
When you allocate a foreign-currency payment, the allocation window shows a Computed Amounts preview and an FX Rate Snapshot with two rates:
- Invoice → Functional — the rate locked when the invoice was issued.
- Payment → Functional — the rate on the payment date.
[Screenshot required: allocation window showing the Computed Amounts preview and the FX Rate Snapshot with the invoice and payment rates]
These let you see the conversion before you confirm. The figures you approve are exactly what gets posted.
Important notes
- The gain or loss is posted when you allocate, not when you first record the payment.
- Part-payments produce a proportional gain or loss — each allocation is worked out on its own.
- Amounts are rounded to each currency's own smallest unit (for example 2 decimal places for GBP, EUR and USD; none for JPY; 3 for BHD), so tiny rounding differences are handled correctly.
- A rate must be available. If no exchange rate can be found for the currencies and date, Sales Scribe stops rather than guessing — it never silently assumes a 1:1 rate. See View and use exchange rates.
- Realised gains and losses appear in your reports under the FX gain/loss accounts you mapped in Accounting Settings.
Troubleshooting
- "No exchange rate available for … " Sales Scribe could not find a rate for that currency pair and date. Check the currency codes, or supply the rate, and try again.
- A message about the Realised FX Gain / Loss accounts. These accounts are not set. Open Settings → Accounting, set the Realised FX Gain and Realised FX Loss accounts, and post again.
- You expected no gain/loss but see one. The payment-date rate differs from the invoice's locked rate. Even a small movement produces a small realised amount — this is correct.