Hi! My name is aleksandra, and I'm new to this forum and I"m new in being self employed. My small business will sell stuff from Uk to other country. I've opened bank account over there, so customers can easily pay me in their own currency. But that's where my problem starts, how to correctly bookkeep it? If I withdraw money from foreign account evey week and pay it into my UK business account, shall I record exchange rate on that date, or the date customers paid money into my foreign account? Do I need to keep records of every sale (eg. receipt for customers) and foreign account bank statesment? Thank You for every help. Sorry for any mistakes I made, English is not my first language. Have a good day!
I guess you shoul keep records of when you exchange the money, as that is the real value you are getting. And yes you always always always should keep records of everysale , this way you can measure how many you made monthly and definetely bank statements will help you to keep track of everything and make your accounting system complete( you can save a record virtually , but always have a backup just in case something happens and you lose data) regards!
Re Your Accounts Hi In terms of your income /expenditure I think HMRC will only be interested in the funds you actually receive into your U.K bank account, so it will be whatever exchange rate is used when the funds hit the U.K That said, if you are now classed as a U.K citizen then I understand you are liable to U.K tax on your worldwide assets and income. :001_smile:
Thank You roversierr!! I come from one of the EEU country and I've been in UK over 2 years, I live here with my family, so I'm classed as UK citizen. Thanks for all your advice. What about recepits? I'm not VAT registered yet, but do I have to send receipt to every customer and keep the copy for myself? If yes, shall I write there price in pounds or customer's currency? Thank You.
If you look closely at Kashflow method of registering sales (or purchases as in our case) in foreign currency you'll see that the system uses the exchange rate you set per currency. The invoice/purchase order is printed/emailed in the foreign currency, the journal posts made with the exchange rate you'd set. Once the invoice/purchase order is paid - no matter what exchange rate you use to calculate the GBP amount - Kashflow gives you the option to "settle the invoice/purchase order" with gain/loss on the exchange rate. If you select this "settle", the difference between invoice/purchase GBP and actual paid GBP will be automagically booked as gain or loss and therefore reflects in your profit and loss account for HMRC purposes. This also "solves" your problem with which currency to use on your customers invoices: the currency they pay you in - just to make things simpler for them (they are not interested in the exchange rate in your system, just what they are actual paying for the products in their own currency)
Now I'm wondering why Kasflow's Business Forum email listed this very old topic? Only noticed it after writing the above. Interested to hear the reason for this?
I think it's a good reminder given that internet sales are increasing all the time and that the original question was about exporting from the UK - We need all we can get given the current EU growth forecast figures!