Best Practices for multi-currency non-zero AccountsReceivable

[Ken Mankoff]

Hi,

I just took a business trip where all expenses should be reimbursed. Afterward, my accounts looked like this:

  Assets:Other:AccountsReceivable:Foo      156.58 USD
  Assets:Other:AccountsReceivable:Foo     1061.17 DKK
  Assets:Other:AccountsReceivable:Foo         15.00 EUR
  Assets:Other:AccountsReceivable:Foo       109.44 GBP

I then got reimbursed

2017-11-15 * "Foo Reimburse"
  Assets:MyBank                                           2944.04 DKK
  Assets:Other:AccountsReceivable:Foo

The account does not go to zero for a few reasons: Maybe I forgot to turn in on receipt, and/or exchange rates have changed, or because a GBP *receipt* that I had to turn in is actually in the DKK currency to me, because I paid for it with a DKK credit card, etc.

Some Questions:

1) I have prices, but not on 2017-11-15. How is a conversion handled? Is it just a linear interpolation between the two nearest prices?

2) Due to the reimbursement, this account has a negative DKK balance. Net balance is still positive, because (using todays exchange rates), the payment (they paid GBP but may bank shows it as DKK) doesn't cover everything. How should I handle this? I could convert everything to one currency, I think, using either todays rate or the rate on the date the reimbursment posted, and then keep a small balance in just one currency. Is there any reason to do this? Or should I just have an "Expense:MiscUnreimbursedExpenses" and transfer everything to that account? Again, if I just transfer, then the expenses account will have the wrong sign for DKK, and appear to contain more USD, DKK, and EUR than it really does (I think).

Thanks,

  -k.

[Justus Pendleton]

It seems like you need to separate out which things are caused by foreign currency losses and which things are caused by unreimbursed expenses. (If you have any unreimbursed expenses, then you are Doing It Wrong IMHO since the whole point of the reimbursement process is to....reimburse your expenses. I understand that in the real world many company's expense departments are not flexible or understanding.)

As far as I can tell, all of the expenses you listed above should be denominated in DKK, since that's the currency you actually paid with. Since you used a credit card?

It doesn't matter what currency the receipt is in. All that matters is the currency you paid in. If you got a receipt in GBP but paid in DKK then you should be recording it as DKK in beancount. And you should be submitting the expense as DKK. If the reimburse you a different amount than you actually paid then the difference should be treated as an unreimbursed business expense.

[Ken Mankoff]

Hi Justus,

On Saturday, December 16, 2017 at 3:36:04 AM UTC+1, Justus Pendleton wrote:

It seems like you need to separate out which things are caused by foreign currency losses and which things are caused by unreimbursed expenses. (If you have any unreimbursed expenses, then you are Doing It Wrong IMHO since the whole point of the reimbursement process is to....reimburse your expenses. I understand that in the real world many company's expense departments are not flexible or understanding.)

I agree, but human error (lost receipt) and real world means I don't get it all back. And sometimes I get more than 100% back due to exchange rates, or per diem being > actual expenses. I'm not worried about the reason for the losses (me losing receipts or exchange rates). I just want to file the single loss appropriates.
 

As far as I can tell, all of the expenses you listed above should be denominated in DKK, since that's the currency you actually paid with. Since you used a credit card?

Sorry if my example was unclear. I recorded them in the actual currency. I have a USD and DKK credit card and spent money in both of those currencies. While traveling I transited through the EU and spent 15 EUR cash in an airport, and then spent the GBP as cash on the ground at the destination.

If the reimburse you a different amount than you actually paid then the difference should be treated as an unreimbursed business expense.

Yes I agree that is where things should end up. I'm still wondering about best practices for reconciling to that account. Do I shift all 4 currency balances from foo to UBE? Or try to zero them out to my primary currency first? etc. 

[Justus Pendleton]

On Saturday, December 16, 2017 at 1:16:14 PM UTC+7, Ken Mankoff wrote:

Yes I agree that is where things should end up. I'm still wondering about best practices for reconciling to that account. Do I shift all 4 currency balances from foo to UBE? Or try to zero them out to my primary currency first? etc. 

If I understand correctly, you are submitting expenses to your company in USD, GBP, EUR and then they are using some exchange rate to pay you back in DKK? The only thing you are missing is what exchange rate they are using, right? You could ask them.

If it were me I'd probably do something like this....

2017-11-05 * "Buy coffee"

  Assets:Wallet -10 GBP

  Expenses:Business

2017-11-05 * "Airfare"

  Assets:Credit-Car -2,000 DKK

  Expenses:Business

2017-11-05 * "Hotel"

  Assets:Credit-Card -500 USD

  Expenses:Business

2017-11-05 * "Taxi"

  Assets:Wallet -15 EUR

  Expenses:Business

2017-11-15 * "Reimbursements"

  Income:Reimbursements 3,100 DKK @@ 500 USD

  Income:Reimbursements 111 DKK @@ 15 EUR

  Income:Reimbursements 84 DKK @@ 10 EUR

  Income:Reimbursements 2,000 DKK

  Expenses:Business

2017-11-16 balance Expenses:Business 0 USD

2017-11-16 balance Expenses:Business 0 EUR

2017-11-16 balance Expenses:Business 0 GBP

2017-11-16 balance Expenses:Business 0 DKK

After all, if you submitted the expenses one at time, isn't that how you'd enter it? The only complication seems to be the batching of reimbursement and the unknown exchange rate used for calculating the DKK to reimburse?

The more I think about the less I see how exchange rates would come into play...unless you track the exchange rate on the day you acquired the euros in your wallet. I don't think many people do that, even with beancount. The only slippage might be if you pay in USD...which turns into e.g. 1300 DKK on you credit card. But your company only reimburses you a 1250 DKK. But that's just an unreimbursed expense...not FX gain/loss.