Bookkeeping Question - Foreign Currency Transactions, PayPal, Expenses Sales...Argh!

Fukuyama

Hi Guys,

I have a small service business I run online - nothing major, just little gigs here and there.

I have no problem accounting for things when my sales/expenses are in euros. However, the prevailing currency on the interwebs is the USD and many of my clients are based in the US, so for their sake, I charge in USD. Others are in the UK who prefer an invoice in GBP, so the waters muddy even further.

PayPal would be my main payment method. I find myself falling down when it comes to keeping track of incoming sales - particularly as PayPal will take a small cut before depositing it into my account, and the currency exchange etc...

I switched my main currency on PayPal to USD to try deal with this, but obviously I just kicked the can down the road until I have to withdraw to my Irish bank account.

Some advice online tells me that I should be doing ALL my bookkeeping in USD regardless of the fact that I'm in Ireland - and only switch over my P&L on the 31st of Dec at the Central Banks exchange rate. This would obviously leave a difference between what cash actually went into my bank account throughout the year in Euros and what was reported on the 31st of Dec as the USD-EUR rate will have fluctuated.

One idea I have is to acquire multiple PayPal accounts for each currency - but PP only allow a bank account account to be attached to one PayPal at a time so that causes issues with getting the cash from PayPal a/c's to by bank account.

Accounting was never my strong suite although I have a handle on the basics. It's just this currency thing trips me up every time.

Any advice would be much appreciated.

Cheers,
Dean

srsly78

Accountant sorts this out for me. He tabulates the sterling accounts at a fixed rate, then contras when I remit via fx broker. Any difference is booked as currency trading profit/loss.