Foreign Currency: How To Manage Foreign Currency Bank Charges

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Question: Hi I have a Euro account and just received a Dollar payment. How do I handle foreign currency bank charges?

Any bank charges have to be recorded manually in a separate bill just a Standard Bill in Money Out, Bullet does not work this out.

So if your bank (Bank A) charge €37.83 for $50 here are the 3 scenarios that can happen, because of this we can’t automate the process.

  1. If Bank A statement says that they charge €1 as a bank charge, then the exchange rate that would be entered by him is 0.7366
  2. If Bank A statements says that the exchange rate is 0.7466, then the charge would be 50c. So a bill for 50c should be manually created by you.
  3. If Bank A dont provide either then the exchange rate of 0.7566 should be entered by you and he can’t record a bank charge bill.

They are all the three scenarios, hope this helps.

  1. Eoin August 12, 2014
    In scenario 3 (which is PayPal since they say the exchange rate was 0.7566 and they don't itemise their currency transfer fee), is there a way to record that hidden transfer fee as an expense?
  2. Peter Connor August 12, 2014
    Yep, you just add it as a standard bill in Money Out. This is why we can't automate it, hidden fees! We can't pick it up. Terrible! Pete
  3. Eoin August 12, 2014
    Excellent info, thanks. And in your opinion which bank account "paid" for the exchange fee? Was it the Euro account that paid for the USD?
  4. Peter Connor August 12, 2014
    Which ever one the fee was charged in Eoin. If in one transaction you touched Paypal and then BOI. You'll be charged two fees so you'll need to do two bills for each bank.

    If the fee is hidden in the exchange rate of say PayPal then the money was taken out of your PayPal account and therefore it's PayPal that paid for it.

    You might hit some reconciliation issues with this, 1 item in the bank but 2 bills covering it. We're working to fix this, you can just skip it for the time being.

    We'd a good discussion on the UI feedback you gave. The bank rec is a complex beast to make easy, never mind the hidden fees of FX!

    Thanks

    Pete
  5. Eoin August 13, 2014
    Fair play for working on it, Pete.

    In our case, we have a transaction from "PayPal EUR" balance to "PayPal USD" balance.

    The exchange rate of 0.7566 includes PayPal's currency exchange fee.

    In this case, I conclude that "PayPal EUR" was charged the fee for purcashing USD to credit "PayPal USD", and I would create a bill against that account additionally for the money lost versus the market rate on that date.
  6. Peter Connor August 13, 2014
    Interesting. It's a fuck up for people. We can't guess fx fees because they work on their on fx rates so we don't know what rate they're charging you. Otherwise we could do the maths for you. You know, USD on the 12/3 is X so take X on the 100 you got paid and the remainder is fees.

    Anyway me might look at the Paypal API to see can we extract it from that. We're always looking for financial partners to allow us remove companies that provide a poor service.

    Tks Pete

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