External currency conversion

shdayshday Member Posts: 3

Hi,

I am Canadian but my major client is US and pays in US dollars. They will be sending my business checks that I plan to deposit into a US-dollar account. To save on the exchange fees charged by my bank, I hope to first transfer the money to my personal US account, do a Norbert's Gambit, and then transfer it back to my business in CAN dollars.

I'm wondering how to best record these transactions in Wave? I've looked at using the "In Transit" assets feature, but I'm not sure how it would work .

Any ideas would be appreciated.

Thanks,

Steve

edited December 14, 2018 in Accounting

Comments

  • ErikErik Administrator Posts: 193 admin

    Hi @shday, to be frank, I don't have experience with accounting for Norbert's Gambit, so this reply may or may not apply. Additionally, my example below assumes that the final deposit uses the exchange rate that is in place on the day of the deposit.

    If that assumption is correct, you would be on the right track in saying that you could use a Money in Transit account.

    1. Create a Money in Transit account and designate it as a USD account
    2. When you make the initial USD purchase, create an expense transaction in your USD bank account and categorize it as a "Transfer to Bank, Credit Card or Loan" -- select the Money in Transit account as the destination
    3. After the Gambit and your CAD account receives the funds, create an expense transaction in your Money in Transit account and categorize it as a transfer to your CAD account

    edited December 19, 2018
  • shdayshday Member Posts: 3

    Hi Erik,

    Thanks very much for the detailed instructions. I think I understand the idea pretty well. In my case, Wave is linked to my business bank accounts. Does this mean I'll need to edit the transactions that Wave imports, rather than create new ones (steps 2 and 3)?

    In any case, I'll play around with it and let you know how it goes the next time I get paid.

    Thanks,
    Steve

  • SamdSamd Administrator Posts: 560 admin

    Hey @shday, that's correct! If your bank is pulling in the transactions you'll just need to edit them rather than create them entirely.

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