Hi folks,
Experience level is that of having done my own bookkeeping for a few years and having learned from some of my mistakes (e.g. not using owner draws
I often use XE Trade to transfer money between the US and Norway (usually USD -> NOK).
At first I recorded these as straight transfers, but obviously that isn't quite right since it takes them a few days to send the money.
Currently I do a transfer into an equity account I created called "International Transfers in Progress" —*I transfer into it on the date I paid XE Trade (generally while doing bank rec) and then I transfer from it to the other account on the day the transfer comes through (generally also while doing bank rec).
I am currently planning to migrate to a new accounting system, and so I get to rethink some things. I'm wondering if I should actually be setting it up as an expense to and income from XE Trade? My beef with that is that then it'll show up on my Profit and Loss, which doesn't really make sense. It's more of a movement of equity that goes through a third party than an actual expense. I suppose I could code it like that anyway and just use an equity account for the account on both ends instead of expense/income accounts? Then this would still represent where it went and came from a bit better, and hopefully the program would also calculate Gain/Loss on Exchange (not that the amount ever gets very big anyway) properly.
I may have answered my own question, but I'd appreciate input (or ask me to clarify if I've used loose terminology).
Kevin
Experience level is that of having done my own bookkeeping for a few years and having learned from some of my mistakes (e.g. not using owner draws
I often use XE Trade to transfer money between the US and Norway (usually USD -> NOK).
At first I recorded these as straight transfers, but obviously that isn't quite right since it takes them a few days to send the money.
Currently I do a transfer into an equity account I created called "International Transfers in Progress" —*I transfer into it on the date I paid XE Trade (generally while doing bank rec) and then I transfer from it to the other account on the day the transfer comes through (generally also while doing bank rec).
I am currently planning to migrate to a new accounting system, and so I get to rethink some things. I'm wondering if I should actually be setting it up as an expense to and income from XE Trade? My beef with that is that then it'll show up on my Profit and Loss, which doesn't really make sense. It's more of a movement of equity that goes through a third party than an actual expense. I suppose I could code it like that anyway and just use an equity account for the account on both ends instead of expense/income accounts? Then this would still represent where it went and came from a bit better, and hopefully the program would also calculate Gain/Loss on Exchange (not that the amount ever gets very big anyway) properly.
I may have answered my own question, but I'd appreciate input (or ask me to clarify if I've used loose terminology).
Kevin