How to Use Exchange Tool
When you go on a vacation in a foreign country, the first things you should take with you are money and your passport. American dollars and euros are accepted as an international method of payment in some tourist countries; you may pay for hotel services and souvenirs in the local shops in your domestic currency. However in some countries you should pay for goods and services in local currency. In such cases you'll have to convert your USD to local currency. The following examples explain how to manage your personal finances while abroad using InEx Finance Exchange feature.
You are vacationing in France and want to exchange some USD for euros to cover running expenses. You go to an exchange office or bank and exchange $1,000. In return you get for example €725. This is how you record such operation in your InEx account:
- Access Transactions tool from the top menu and click on Add Transfer/Exchange from Transactions drop-down list.
- Select the Date of your currency conversion from the flash calendar (for instance, October 12, 2011).
- Choose the corresponding Resource in “From” field, enter the amount converted from and select the corresponding currency (for instance, “Cash”, “1000” and “USD”, respectively).
- Choose the corresponding Resource in “To” field, enter the amount converted to and select the corresponding currency (for instance, “Cash”, “725” and “EUR”, respectively).
- Optionally, you may enter some Tags and write a short Comment.
- When done, click on Create button to add your new Transfer/Exchange Transaction.
If the currency you convert to is not in the list, please follow the instructions in our Help guide to add the currency you need.
If you go back to the Transactions page, you'll see 2 separate entries posted to your account, both with the Category “Transfer/Exchange”: the first one is the expense Transaction ($1,000) and the second corresponds to the income Transaction (€725). Later if you want to make any changes to this Transfer/Exchange Transaction you may click on the Edit icon corresponding to either one of the 2 linked entries.
You are on holiday in Italy and are having dinner at a restaurant. When the check comes (for instance, €113) you decide to pay with your Visa card issued in the US. Although the check is in Euros, your card will be charged in US dollars. Paying with your credit card instead of cash doesn't eliminate the currency conversion fees. Depending on your credit card issuer or bank, these fees can add up to a 3 percent total charge on foreign purchases (you can read more about foreign transaction fees here). Thus when you check your card statement, you see that you were charged $155.80 by the restaurant and $4.67 currency conversion fee.
In the case described above, you don't record the dinner check in your InEx account as a standard expense Transaction in the amount of €113, since you don't have any actual money in Euros on your credit card. In fact, you have 2 different options on how to handle such operations (with conversion fee included):
- You add a standard expense Transaction in the amount of $160.47.
- You add a Transfer/Exchange Transaction as described in Example 1 above (amount in field “From” should be $160.47, amount in field “To” should be €113). Then you add a standard expense Transaction in the amount of €113.
If you need to find all Transfer/Exchange Transactions quickly, you can use the Table Report “Category Turnover”. Since Transfer/Exchange is a system Category, it's easy to track such operations namely by their Category. Choose the date range, select “Transfer/Exchange” in the Category field and click on Filter button. You can arrive at this report either by clicking on “Transfer/Exchange” link in the right sidebar on the Overview page or accessing Reports tool from the top menu.