This article explains how to create an invoice in a currency other than pounds sterling (GBP), such as euros or dollars.
Navigate to the ‘Work’ tab at the top of the screen and select ‘Invoicing’ from the drop-down menu.
Select ‘Add New Invoice’ and follow the steps for creating an invoice in FreeAgent.
Choose the currency for the invoice from the 'Currency' drop-down menu. Please note that if you want to link the invoice to a project, you need to choose the same currency that you've already set for that project.
Once you’ve entered the relevant information, select ‘Create New Invoice’ at the bottom of the screen.
When you add items to this invoice, they'll be in the currency you chose.
You can't put different items on the same invoice if you want to charge your customer for them in different currencies. Each invoice can only be in one currency.
FreeAgent will charge VAT depending on how you've set up the contact to whom you're issuing this invoice.
Exchange rate differences
You'll notice at the bottom of the invoice, a panel showing 'Unrealized' and 'Realized' gains.
This shows any gains or losses for that particular invoice if the exchange rate changes between the date the invoice was issued and the date it was paid. It also shows you how much you could expect to receive in your base currency (that's £ sterling for our UK customers) if your customer paid you today.
FreeAgent has exchange rates ready programmed in from the exchange rate site xe.com and works out these figures automatically.
But FreeAgent will handle all that for you seamlessly.
I'm curious now. How does this happen?
If you want to see how this happens, look under Accounting > Reports > Show Transactions.
Under the Trade Debtors account, number 681, you can see that every day an invoice remains unpaid, FreeAgent puts an entry through to revalue it. It'll make one entry per day per currency, so that if you have some invoices in Euros and others in dollars, you'll see one line per day for dollars and one for Euros, like this.
The opposite entries for these go to the Unrealized Gain or Loss account.
And once all or part of the invoice is paid, all or some of that gain or loss will move to the account for Realized Gain or Loss, like this.