Hate to join just to bother you with one question but I can't find my answer. I really have no idea about accountacy and balancing my checkbook is hard.
I am an American living in a foriegn country. Here, simple things are very expensive, and thus I have resorted to ordering from the US, my home country, and having things shipped to me. I've saved about 50% on some items. I'd like to make a business out of it and record my cost and profit. My issue is this:
the items I buy in USD, with USD from my US bank account. When the stock arrives here I'll sell it in the local currency. How and when should I do my foriegn conversion?
I'd like to do it once per order. Perhaps the day I made the purchase, however it takes a few days for it to be recorded in my US bank account. If I do it this way what day should I use for my currency? The day I made the purchase or the day the funds were deducted, or maybe the day the stock arrives and is ready for sale?
Since no conversion had actually taken place yet should I do it on every item when it is actually sold? That is a lot of extra leg work.
Also how do I determine what exchange rate to use? Is there one set for the day, and living in opposite sides of the world how to I know what exchange rate to use?
Any help would be appreciated. I am new at this, but I want to be succesful and believe that good accountacy is what will make or break my business. I'd really like to track sales, and overhead, to look at projections and gains to make better decisions. My parents never did this but I want to learn to teach my children too. Thank you for anyone who is willing to help me and answer my questions.
I am an American living in a foriegn country. Here, simple things are very expensive, and thus I have resorted to ordering from the US, my home country, and having things shipped to me. I've saved about 50% on some items. I'd like to make a business out of it and record my cost and profit. My issue is this:
the items I buy in USD, with USD from my US bank account. When the stock arrives here I'll sell it in the local currency. How and when should I do my foriegn conversion?
I'd like to do it once per order. Perhaps the day I made the purchase, however it takes a few days for it to be recorded in my US bank account. If I do it this way what day should I use for my currency? The day I made the purchase or the day the funds were deducted, or maybe the day the stock arrives and is ready for sale?
Since no conversion had actually taken place yet should I do it on every item when it is actually sold? That is a lot of extra leg work.
Also how do I determine what exchange rate to use? Is there one set for the day, and living in opposite sides of the world how to I know what exchange rate to use?
Any help would be appreciated. I am new at this, but I want to be succesful and believe that good accountacy is what will make or break my business. I'd really like to track sales, and overhead, to look at projections and gains to make better decisions. My parents never did this but I want to learn to teach my children too. Thank you for anyone who is willing to help me and answer my questions.
