Accounting for Foreign Currency Transactions with A2X and QBO | Shopify and Amazon Sellers

1:08 How A2X handles Amazon deposits

But just to kind of recap this part really quick. One of the things that we love about A2X is that it takes the ambiguity around just these deposits that hit your bank account like every couple of weeks. And this is just like Amazon's net of everything you're doing with Amazon. So your whole relationship with Amazon is encompassed in this one deposit. So it's all your sales activity, it's all your refunds, chargebacks, anything that was collected for shipping. Then if you're also advertising on Amazon, and if you're using FBA for fulfillment, it will also have all that activity that will just be netted there.

And so what it does is, A2X takes all of the stuff that happened and it makes a journal entry that lets you see what really happened. And then it creates in that journal entry a line that will actually match to the deposit that actually hits your bank account. So that when you're in your bank feed and you see those transactions come through from Amazon, if you have pushed over this information from A2X, which like I said, I have a whole nother video that talks about how to do that in depth so I'm not going to go into that here, but we do have another video on it, that it will literally just match.

2:14 Why I made this video

So I actually wasn't going to do this video initially. This wasn't on our content plan at all. But tonight, as I was kind of wrapping up a project for another client, I had to actually push over and accept some activity from Mexico and Canada. And we have a whole team who normally does all of the Amazon and the A2X activity and stuff like that, and so I hadn't ever personally had to do this process.

So even though I'm really familiar with A2X and I'm really familiar with how they work as a tool, because I've never actually done this process before, and there was a couple steps that I wasn't aware of, I spent a lot of time kind of banging my head against the wall and trying to figure out what to do, and thought I was going to have to go in and try to recalculate all these foreign currencies. And I was like, A2X is usually really great about this, making it easy, why isn't this easy?

And so I reached out to somebody on our team and I said, hey, what's going on here? And they sent me back a video that was part of our training manual for our employees that was two minutes and 44 seconds long, and it was literally so fascinating as soon as I knew how to do it. And I was like, oh my gosh, if me, who is an experienced A2X user, is kind of banging my head against the ground on this, I bet some other people are too. So that's why, it's literally like 11:30 at night and I was like, I'm making a video on this, because clearly there's need.

3:28 Turn on foreign currency and find your settlements

So first of all, I need to say that if you're going to be using multiple channels with Amazon, you need to make sure that QuickBooks is set up for foreign currency.

So you come up here to your gear icon, you come over here to account and settings, and you go to where it says advanced, and come down here to where it says foreign currency. In this particular set of books it's already turned on, but if it wasn't, then you would just edit it and you would say on instead of off. It'll give you a warning that basically says after you turn it on you can't turn it back off. Do not fear the unknown, move forward with courage.

If you're not using foreign currency, fine, it'll be like a feature that's just turned on. It doesn't cost you more to have foreign currency turned on. Well, you have to have at least QuickBooks Plus to use foreign currency, but other than that, if you're already on it, it's just a matter of turning it on. So make sure it's turned on. It has to be turned on in order for this process to work correctly.

4:21

Over here in A2X you can see, in this area where we have our settlements, these are all of the different deposits that have come in from A2X. And I can see here exactly which marketplace is settling. So this is Mexico, you can tell by the MX, and this is US because it's dot com, and this is Canada because it's dot ca.

And I can see this is the amount in Mexican pesos that originally settled, and this is the amount in Canadian dollars, and this is just straight up US dollars. So Amazon will do all of your activity in the home currency of whatever the activity is happening in, so like Mexican pesos and Canadian dollars, but it will settle into your bank account in dollars. And that's where a little bit of the trickiness comes in. But do not fear, A2X is here. Not even rhyme.

5:07 Matching a US deposit, and why foreign ones won't

Okay, so come over here. So when you are in QuickBooks and you're on your bank feed, if it's a US-based transaction, you'll see it shows up just like this, you'll just get a match. And I'm just going to show you what it looks like in case you've never seen this before.

So remember, one deposit amount, and if I'm just calling that sales then I'm super, super misstating everything. I go into that a lot when I showed you that slide, but know that that's basically what I'm saying, is you're misstating everything if you're just calling it sales.

So A2X fixes all that for you. So if you open up the journal entry, you can see it breaks it up and it basically shows you what's really happening here, and it maps it to your chart of accounts, and it's really, really great. So it makes it so easy. All I have to do is say match, and literally the accounting is done.

5:55

Now what about these other things? So this is what it looks like when it settles from Amazon Mexico, and this is what it looks like when it settles from Amazon Canada. And even though I've pushed over all these transactions, so you look over here, they've all been pushed over, I'm not seeing a match here.

And this is where I started banging my head against the table the other day, is because even when you click on this and you say find match, there's no, okay, well there is something here, but that's not supposed to be here, and you can see that it's not actually a match. So all the stuff that's saying, well what about this, and what about this, what about this, none of this is legitimate.

6:32 The foreign currency button

So what you need to do, that I didn't know until I reached out to my team that does this all the time, is you click on foreign currency. And when you click on foreign currency, then it will show you all these other options, of which these ones come up.

So this is the amount that actually settles into my bank account, so $1,376.79. I'm basically looking for the amount that is closest to this. So it will either be right on the money, and it is, all night long as I've been doing this it's always been right on the money, but occasionally it will be a couple of cents off. When it's a couple of cents off, so that's the right one, I'm gonna select it.

So it tells me, hey, this is the [unclear], this is the foreign currency exchange rate that was used when Amazon deposited it. So this is the amount. If it's a couple of cents off, if I just say save, it will actually change the foreign currency rate to match it. So fear not, move forward with confidence and peace in your heart, and select this anyway.

7:23

So make sure the time frame is correct. So I can see here this was a time frame April to April 20th, and this is settled right after that, and so this is the right one, and this amount.

And if you want to kind of go back to A2X and make sure that you're looking at the right screen, so this is the Mexican peso settlement amount, this 27 thousand dollars. And if I come in here to A2X, and that was like April 6, you can see right here. Oh wait, no, right here. Okay, wait, hold on. Oh wait, 27,825. Okay, so 27,825, this one right here. So this is the one that I'm looking for, and this is the one that settled, and this is the deposit.

So then I just say save. And it really is that easy. Isn't that awesome? Like, oh man, all the pain I was causing myself not knowing that simple little trick. So you're welcome, you're welcome. I just saved you so much pain. You're welcome.

8:12 The A2X and QBO setup package

So if you are an Amazon seller and you're interested in using A2X, we do actually offer, if you're not quite making enough to justify just handing us over your accounting, which you will thank yourself for later, but if you're not quite large enough to justify that, we do actually have a package now where we'll set up QuickBooks Online and A2X for clients, and then we'll spend like an hour consulting with them, showing them how to use QuickBooks, how to use A2X. And it makes it so you can go from, like, I don't know anything about this, to, I can move forward with confidence. That's what our goal really is with this package.

So if you go to our website and you just go here to services, and you go all the way down to QuickBooks Online, and you see where it says A2X setup, you'll have it there. Also, if you go to A2X's website and you scroll down here to where it says find an expert, right here at the very very top you'll see this is us. Boom boom boom, we are the featured listing, because we are that amazing. And if you say learn more here, right here on this page it will also take you to the link for A2X setup and consulting package. So, always an option for you.

Also, otherwise, make sure you subscribe to our channel if you're interested in more great content, and we do have great content. Visit our website to see blogs. Reach out to us if you're interested in having us take over your accounting, or if you are just interested in having us set up A2X for you and running on your own power. Godspeed.