Exchange Rates / Paypal Multi Currency / General Currency Conversion

Hey guys I am a new convert from Wave and am loving the speed of Manager. I just processed a year’s worth of transactions in less time than it was taking me to do a month in Wave :slight_smile:

One thing Wave did well was deal with Paypal’s General Currency Conversion events. You could mark two transactions as a transfer (one in AUD and one in USD) and the currency conversion would be assumed and dealt with automatically in the background.

So my question is, is there a way to do something similar in Manager. Maybe automatically update exchange rates or import them from another source?

Here’s my setup:

I have two Paypal Multi Currency accounts both with hundreds of General Currency Conversion events happening between USD and AUD.

I’ve imported all these transactions into separate USD/AUD bank accounts in Manager and am using a Transaction Clearing Account to account for these events and cancel them out.

However from what I can tell Manager is just using a single conversion rate of 1.08, and there doesn’t seem to be a way for me to change this other than manually setting a conversion rate for each of the 365 days of the year.

Your work flow isn’t clear, But have you looked at using inter account transfers? If the two accounts are denominated in different currencies, you can simply enter the amount in each currency and Manager computes the effective conversion rate.

I was hoping there would be a more automated way of dealing with it than having to manually create an inter account transfer for every transaction. That would also mean editing the Paypal csv files before importing into Manager (to remove all the General Currency Conversion transactions) which potentially introduces more human error.

Here’s my workflow:

  • Export USD transactions from Paypal.
  • Import into Paypal - USD bank account in Manager.
  • Export AUD transactions from Paypal.
  • Import into Paypal - AUD bank account in Manager.
  • Repeat for the other Paypal account.
  • Bank rule processes all “General Currency Conversion” transactions to a Transaction Clearing Account.

This all works great apart from the conversion rate not being correct.

Hope that makes sense.

The exchange rate in place when you first install Manager is a placeholder. All changes must be manually entered after that. What is not clear is why you have all these currency conversion events in Manager. If you are importing PayPal statements in USD to a USD bank account and AUD to an AUD bank account, no conversions are necessary. The transactions remain in the currency in which they occurred. Exchange rates would only come into effect (a) when transferring money between the USD and AUD accounts or (b) for purposes of updating your balance sheet, when the program automatically converts everything to your base currency.

A currency conversion event happens in Paypal every single time you:

a) withdraw USD to your AUD bank account.
b) make a Paypal payment in USD using Paypal AUD funds.
c) make a Paypal payment in USD using Bank Account AUD funds.

These are daily (often multiple times a day) events in both accounts.

So for example, when I import my Paypal USD account into Manager it might show a transfer out of $USD100. And my AUD bank account statement will show a corresponding transfer in of $AUD140.

So it sounds like I’m going to need to either manually add a currency conversion rate for every single day of the year. Or manually create an inter account transfer for each event and delete the stuff coming in from my import.

Would be great to just be able to import a csv of daily currency conversion rates for the year :slight_smile:

Two observations:

  1. The process you described in your latest post isn’t what you described in the one before that. You originally described exporting PayPal statements in a currency and importing them to Manager in the same currency. Now you’re describing multi-currency transactions. We can’t give advice when the circumstances are changing.

  2. You can use batch operations on exchange rates. Read the Guide: Use Batch Create and Batch Update functions | Manager.

The circumstance hasn’t changed at all, I think you just misunderstood.

I wasn’t describing a process in my second post. I was explaining when these “General Currency Conversion” events happen in Paypal. My process for dealing with them is exactly as I described in the post above where I say “here’s my workflow”.

I am exporting statements from Paypal in one currency and importing them in the same currency into Manager. The problem is how to deal with the matching “General Currency Conversion” transactions once they are in Manager.

Perhaps a screenshot will make it clearer. This is an example of use case c, making a payment in USD from an AUD bank account:

Here you can see a transaction in Paypal to Access USA Shipping for $USD7.

There were no USD funds in the account at that time, so the payment is pulled from my AUD credit card / bank account. This in turn triggers a currency conversion event. You can see the resulting transactions are:

  • a transfer from my bank account of $AUD10.39
  • a currency conversion debit in Paypal of $AUD10.39
  • a currency conversion credit to Paypal of $USD7
  • a payment to Access Shipping for $USD7.

So now when I do my bookkeeping, I import the USD transactions from Paypal into my “Paypal - USD” bank account in Manager. And I import the AUD transactions from Paypal into my “Paypal - AUD” bank account in Manager.

From there I am using a Transaction Clearing Account to try to balance out the currency conversions, as you can see here:

But obviously the conversion rate was incorrect on this date so the numbers don’t match.

I hope that all makes sense, it seems like this would be an extremely common occurrence for anyone using a multi-currency Paypal account. And I hoped there was a simple (automated) solution.

Anyway, thanks for the idea of using batch operations, I’ll give that a crack.

Can’t find historical currency conversion rates from Paypal so that idea was a bust anyway.

Looks like I’ll have to go through each transaction, do the calculation manually, and add a conversion rate for each day.

Would be great if you could just select two transactions and mark them as a transfer and have the software assume the currency conversion based on the numbers. That’s one of the few things I liked about Wave and it worked well.

My understanding is Manager has the facility to maintain bank accounts in different currencies. Foreign customers / suppliers can have transactions with you via your foreign currency account. You can transfer funds between your foreign account and local bank account, intermittently as cash flow requires.

You could implement this model by having some financial reserves in your foreign PayPal account and intermittently transfer funds into / out of it. Foreign sales would be in the foreign currency, and as a result, you would be exposed to losses/gains due to currency movement.

But according to your description, from the perspective of your accounting system, I do not believe you actually have any foreign currency sales at all.

You buy/sell the an item in local currency at a local currency price, so a local currency sale from your accounting perspective. You have set up a currency conversion service to convert to/from the foreign currency. The other party assumed the currency conversion financial risk. Conversion is done per item sold and is incorporated into the item sale.

Assuming this is the case; documenting your financial flow maybe best done by a custom field recording the foreign currency amount for the other parties reference but otherwise not used by your account system. Batch update and external code (to match/merge transactions) maybe the most efficient way of incorporating this flow into Manager. A custom theme maybe required to display the sale in and acceptable manner for your customer.

I think I understand what you’re saying, but not sure it applies to my situation.

For example, here’s a pretty typical day in my Paypal account:

  • A sale is made for $USD797. A fee of $USD 28.99 is paid on this. I net $USD768.01.
  • I withdraw $USD600, and keep the remaining $USD168.01 in my USD Paypal.
  • A currency conversion event is triggered (where I am exposed to currency fluctuations / risk) and I receive $AUD772.24 in my AUD bank.

Sometimes the USD is kept in Paypal for days or weeks waiting for a better exchange rate. Other times, especially during high volume sales days, it is transferred out multiple times a day.

It seems to me the only currency conversion occurs as part of the inter account transfer. For that you can enter the exact amounts and Manager will calculate the exchange rate.

Be careful to segregate fees charged by PayPal from any conversion issues. Those are not part of the transfer.