Bookkeeping Problem.md

I've talked with a couple bookkeepers (one independant, one part of a larger company that does a lot of books) and none of them seem to have experience with a Canadian based sole proprieter dealing with primarily US based clients.

My business is relatively simple: send out an invoice for services, client pays it, I get the money and buy more supplies to survive winter in Canada. I have a Canadian CIBC business account, a Stripe account, a PayPal account, and a Canadian Visa card for expenses.

Here's where I get stuck with trying to figure out my books.

Example of Transactions

May 1st: Client A pays a $500USD invoice which goes into Stripe.

May 4th: Client B pays a $1,000USD invoice which also goes into Stripe.

Both invoices are tracked into my Wave USD invoice tracking system as well as a financial trail exists into Stripe.

May 10th: Stripe sends $1,500USD (less stripe fees) to CIBC (CAD).

In case it's not obvious, the difficulty comes in tracking what the USD>CAD exchange rate was on the day the invoice was paid, and lining that up with what gets deposited in my bank account a few days later. I think? I'm really confused.

Questions

1. How much do I, as a sole proprietorship, care about matching invoices to those payments all the way through vs just using whatever is dumped into my CIBC (CAD) account as my income? I don't want to do anything illegal or shady - but I also don't want to do a whole ton of unneccesary paperwork just to file my taxes.

2. Wave requires me to set up a USD account seperate from my CAD account to track USD payments recieved. QuickBooks Online supports multi-currency (apparently). Would my life be easier if I switched to using QuickBooks Online for invoicing? Or maybe Xero would be better?

Thoughts? Leave a comment below, tweet me here, or contact me on my website.

Xero seems like the best option as far as what's come back on Twitter and elsewhere:

• TheSusanBoles:

Xero can handle it pretty easily, as long as you're on the top plan (that has multi-currency). Then you can pick on an invoice by invoice level whether you want to invoice in UDS or CAD. That's what I do with one of my clients that is always invoicing in GBP but is a US company

John in a private Slack group:

Not Canadian, but same or similar problem. We are almost entirely paid in USD that mostly end up in AUD, via three methods: A paypal account, money mostly sits there in USD, and we pay for services from it in USD or EUR, and occasionally we withdraw back to our AUD bank account. Via our payment gateway (your equivalent of stripe) in AUD, less fees for currency conversion & transactions. Direct transfers of USD into our Australian bank account by those we invoice manually. We use a standard online accounting tool (Xero), and it handles it all no problem, and our accountant has never had an issue reconciling it all with exchange rates etc and having balances in different currencies even though it does seem like it could be problematic from our PoV! Been doing this for many years now.
This must be far more common in CA, so surprising if your accountant can't get their head around it.

Arfan in the same private Slack group:

My accountant (ConnectCPA, Toronto based company) they basically specializing in cloud accounting. They got me using XERO for the past 5+ Years. Majority of our transaction is USD and majority of our clients are in the US including one of our bank account as well. I believe it records the current exchange rate for that particular day when doing my yearly taxes. However strongly suggest using Xero.