🌐 Web app | 👤 Finance
Yokoy converts expense amounts (i.e., receipts) in foreign currencies to your company currency both to enable matching and to reclaim VAT after export.
However, the conversion of transaction amounts is dependent on the bank providing your company cards and may therefore differ slightly from the expense amount.
Conversion rates for transactions
If the transaction currency is a foreign currency, therefore deviating from the predefined booking currency (i.e. legal entity currency or the card currency), a conversion to the booking currency becomes inevitable.
When determining the conversion rate, there are mainly two options that the Federal Tax Administration (FTA) offers:
Use exchange rates published directly by the regulator
Use fair market rates
In a company operating internationally, the first option would mean that one must integrate exchange rates of several regulators. The main disadvantage of this option is the complexity and inconsistencies of each regulators data (such as irregularity and latencies in publishing the FX rates, not all world currencies are supported etc.).
Therefore, Yokoy follows the second option and uses daily closing exchange rates for the conversion of the total transaction amount in foreign currency. These exchange rates are tracked and blended algorithmically from multiple reliable sources, ensuring fair and unbiased consistency.
💡 Tip
For the different ways you can handle foreign currency charges associated with transactions, see Why do some transactions include the foreign currency charge, whereas other transactions separate it?
Differences between transaction amounts and expense amounts
Yokoy converts expense amounts (i.e., receipts) to your company currency. It does this using fair-market rates by applying the daily closing exchange rates determined for the company for the conversion of the total amount in foreign currency. These exchange rates are tracked and blended algorithmically from multiple reliable sources, ensuring fair and unbiased consistency.
However, due to the exchange rate differences and transaction fees, there may be minor differences when comparing the final amount converted and calculated by Yokoy. For example, the expense amount is EUR 111.85, while the transaction amount (EUR 114.92) corresponds to the amount paid in a foreign currency and converted by the card provider. The resulting delta (EUR 3.07) cannot be changed and is visible in the export. It can therefore be booked in line with your company policy for transaction fees and exchange rate differences.
Yokoy exports the transaction amount in card currency to ensure that the actually paid amount equals to the total amount booked on the expense accounts.
As the card providers data does not include sufficient details in the applicable VAT rate and amount, Yokoy sources this data directly from the original receipt in foreign currency via the AI-based OCR. To arrive at the VAT amount reclaimable, Yokoy then converts the transaction amount from the original receipt by using the exchange rates.
Booking strategy for transactions
The following illustration outlines Yokoy’s method for processing the card transactions, converting the foreign currency amounts in order to finally book them in the accounting ledger.
You can set the the currency you want to export amounts in the Admin > Company menu, at the bottom of the section titled Enable company cards for this company. This allows you to determine if you prefer amounts to be exported in the card currency, transaction currency, company currency, or original expense currency.
Yokoy exports the Transaction Amount in Card Currency (CHF 640.96) to ensure that the actually paid amount equals to the total amount booked on the expense accounts. As the card providers data does not include sufficient details on the applicable VAT rate and amount, Yokoy sources this data directly from the original receipt in foreign currency via the AI-based OCR.
To arrive at the VAT amount reclaimable, Yokoy then converts the expensed amount from the original receipt (EUR 581.58) by using the exchange rates from openexchangerates.org as described above.
Due to exchange rate differences and transaction fees, there may be minor differences (CHF 4.00) when comparing the final amounts converted and calculated by Yokoy (CHF 591.42 + CHF 45.54 = CHF 636.96) to the amount paid by card in a foreign currency and converted by the card provider (CHF 640.96).
These differences can be booked separately as follows:
