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Matching Internal Movements Of Funds And Refunds For Personal Expenses

When matching transactions that are internal movements between accounts belonging to your business, or a refund of a personal expense that you inadvertently paid with your business card, there are some aspects to consider:

Matching internal movements of funds between accounts belonging to your business

As explained here, this type of matching should be used to indicate transfers between business accounts. For example, if you've transferred funds from your business checking account to your business savings account, you'd categorize it as an internal movement of funds.

Avoid using internal movement transactions for exchanges between your Estonian business and other individuals or businesses, even if you own both entities. Internal movements strictly refer to transactions within the same business entity (your Estonian business).

Our system verifies that transaction amounts are equivalent and opposite. It compares the gross amounts to ensure accuracy and accounts for fees to prevent discrepancies.

For instance, if Stripe transfers 1,500€ to your Wise account, there will be an outgoing transaction of precisely -1,500€ from Stripe and a corresponding incoming transaction of +1,500€ in Wise. Similarly, if you transfer 1,000€ from your LHV bank account to Wise for international payments, LHV will show a -1,000€ outgoing transaction, while Wise will register a +1,000€ incoming transaction.

Keep in mind that a +1,000€ incoming transaction in Wise cannot be matched with another +1,000€ incoming transaction from LHV. When money moves from one account to another, the transaction is recorded as negative (outgoing) in the sending account and positive (incoming) in the receiving account.

In the case of transferring money between accounts of different currencies, we apply the currency exchange rate between these two currencies at the time of the transaction, and account for a potential error margin. The transaction must fall inside this error margin rate. For example, if you send 180€ from a EUR account to a USD account on February 7, and the USD/EUR exchange rate at that time is 1.08, we expect the amount to be around 184.68 and 204.12 USD, applying an error margin.

When transferring funds between accounts of different currencies, we utilize the currency exchange rate between the two currencies at the time of the transaction, accounting for a potential error margin. The transaction amount must fall within this error margin rate.

For instance, suppose you transfer 180€ from a EUR account to a USD account on February 7, and the prevailing USD/EUR exchange rate at that time is 1.08. In this scenario, we anticipate the transferred amount to range approximately between 184.68 and 204.12 USD after applying the error margin.

Matching Refunds For Personal Expenses

A refund for personal expenses indicates that a member of the company used corporate funds for a personal expense and later reimbursed the company. This matching process involves two transactions: the initial expense transaction and the subsequent refund. The refund transaction must originate from the personal bank account of a company member, matching the exact expense amount. For instance, if you accidentally used your corporate card to pay 3€ for a Starbucks coffee, you would refund the 3€ from your personal bank account to the company's account and categorize it as "Personal expense refund."

This matching method should not be used for transferring funds between unrelated entities or individuals. Transactions involving third parties require corresponding sales or purchase invoices.

Similar to internal movements between accounts, refunds for personal expenses adhere to specific rules to ensure accuracy. The system verifies that the refunded amount matches the original expense amount precisely.

Moreover, for personal expense refunds, we verify that one of the transactions involves a member of the company. This precautionary measure prevents potential money laundering scenarios where funds are transferred between unrelated entities. The system cross-checks the senders and recipients of transactions to confirm that the refund originates from a company member.

If you are having trouble linking a refund for a personal expense because the system won't recognize one of the transactions as coming from one member of the company, please check the recipient of the transfer and ensure that you are selecting the right transfer. If you are certain that the transaction came from the personal account of one of the members of the company, don't hesitate to contact our support team.

Updated on: 17/04/2024

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