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Scenario 1. Sell Cryptocurrency → Receive Fiat Funds → Pay the Supplier
Overview
This scenario describes the process where cryptocurrency is first converted into fiat currency, and the received funds are then used to pay the supplier through the standard banking process.
This approach is the most common payment method because it allows the supplier payment to be processed using traditional bank transfers while cryptocurrency operations are handled separately.
Process Flow
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Business Scenario
The company purchases cryptocurrency and records it as an asset.. The cryptocurrency is subsequently sold to a customer. The proceeds from the sale are used to settle the supplier's liability.
Process Flow
Cryptocurrency Purchase
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Cryptocurrency Sale
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Fiat Currency Received
↓
Supplier Payment
Processing Steps
- Create an Invoice Received document to record the purchase of cryptocurrency. Select the appropriate asset account for recording the cryptocurrency according to your company's accounting policy.
For detailed instructions on how to create an Invoice Received document, refer to Invoices Received guide.
2. Create a Sales Invoice document to record the sale of cryptocurrency.
For detailed instructions on how to create a Sales Invoice document, refer to: Invoices guide.
3. Record the customer's payment using a Bank Receipt document.
For detailed instructions on how to create a Bank Receipt document, refer to: Bank Receipts guide.
4. Create a Bank Payment document to settle the supplier's liability.
For detailed instructions on how to create a Bank Payment document, refer to: Bank Payments guide.
Scenario 2. Settle Supplier Payable with Cryptocurrency (Mutual Settlement)Business Scenario
Business Scenario
The company has cryptocurrency recorded as an asset. A supplier provides goods or services, and the company records a payable to the supplier. The company and the supplier agree to settle the outstanding liability by using cryptocurrency. To reflect this arrangement in FirstBit Software, the company records the sale of cryptocurrency to the supplier and performs a mutual settlement between the payable and receivable balances.
Process Flow:
Goods Received from Supplier
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Supplier Payable ...
Created
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Cryptocurrency Sold to Supplier
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Supplier ...
Receivable ...
Created
↓...
Process Description
The company sells cryptocurrency through an approved cryptocurrency exchange or service provider.
The received fiat funds are transferred to the company's bank account.
The supplier payment is processed using the standard banking procedure.
The related accounting operations are recorded in FirstBit Software using standard accounting documents.
Accounting Approach in FirstBit Software
Since dedicated cryptocurrency functionality is not available in the standard configuration, the operations related to this scenario are reflected using standard accounting documents.
The accounting workflow includes:
recording the cryptocurrency-related transaction using the available accounting functionality;
recording the receipt of fiat funds;
recording the supplier payment.
The exact set of documents and accounting entries may vary depending on the company's accounting policies and the configuration settings used in FirstBit Software.
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Mutual Settlement
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Payable and Receivable Cleared
Processing Steps
- Create an Invoice Received document to record the goods or services received from the supplier. The document creates a payable to the supplier.
2. Create a Sales Invoice document for the same supplier to record the sale of cryptocurrency. Select the appropriate asset account for recording the cryptocurrency according to your company's accounting policy.
3. After creating both documents, the company has two outstanding balances with the same supplier:
- a payable balance resulting from the goods or services received from the supplier;
- a receivable balance resulting from the cryptocurrency sale.
4. Create a Mutual Settlement document to offset the payable and receivable balances with the supplier. Select the Transaction Type Mutual Settlements. In the Customer and Supplier fields, select the same supplier company to match the receivable and payable balances.
For detailed instructions on how to perform a Mutual Settlement, refer to: Mutual Settlements guide.
Important Notes: The actual transfer of cryptocurrency to the supplier is performed outside FirstBit Software, for example through a transfer between cryptocurrency wallets agreed by both parties.
In FirstBit Software, the transaction is recorded using standard accounting documents. The Sales Invoice and Mutual Settlement documents are used to reflect the settlement between the company and the supplier.
No bank transaction or cryptocurrency transfer document is created in FirstBit Software for this scenario.
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