My processor converts foreign sales before paying me. Which amount belongs in the books?
Foreign-Currency Sales and Processor Conversion Fees. A specific owner scenario, the facts that change the answer, and the records needed for a tax review.
By AE Tax Advisors Team · Updated October 28, 2026
Keep the sale amount, conversion and processor charge identifiable. The net domestic-currency deposit alone may conceal fees and exchange differences that belong in separate parts of the reconciliation.
A specific business-owner situation
A seller invoices overseas customers in euros. The provider converts each payout after deducting fees, while the owner's sales software uses a different rate. The books need a consistent translation approach and a trace from each order to its settlement.
Illustrative example, not a client result.
What to establish before filing
- Preserve original-currency sales and settlement dates.
- Separate conversion charges from exchange differences.
- Apply a consistent supported tax translation method.
Which fact changes the answer?
A sale invoiced in dollars but paid through a foreign bank differs from a foreign-currency receivable. Establish the currency of the obligation before deciding how exchange changes arise.
A mistake to avoid
Treating every difference between invoice and deposit as a processing fee can hide actual currency movements.
Records that support the decision
- Foreign-currency invoices.
- Processor rate detail.
- Bank deposits.
- Refund and conversion reports.
The decision to document
Ask the preparer for a documented currency policy and a sample reconciliation. Keep original data so a later refund can be matched to the correct transaction.
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Related questions
- Our store closed, but the processor released a reserve later. Which business reports it?
- Our processor rebated fees we deducted last year. Does the refund reduce this year's sales?
Sources and editorial context
General educational information prepared with AI assistance. No individual professional review is claimed. Apply the relevant tax-year rules to the actual records. Editorial policy · AI disclosure.