The automated accounting function from Shopify works in two steps:
- First, sales and any returns are recorded.
- Then, the payout from Shopify Payments is recorded.
As these two steps occur with some time interval, as a merchant dealing in foreign currencies, you need to manage currency fluctuations. These changes can be either positive or negative for you as a merchant, depending on how the foreign exchange market fluctuates.
In the first step, the sales made are recorded against a receivables account. When the payout then occurs, the paid sum is offset from the same receivables account. It is here that a difference can arise depending on whether the exchange rate has gone up or down since the original order was placed. The resulting account difference must be handled manually by creating a voucher that uses either accounts for Currency Exchange Gain or Currency Exchange Loss, depending on whether the difference is negative or positive.