Transfer Fee field in the Money Transfer

When you make a Money transfer (especially between currencies), there are additional costs:

  • Bank fees

  • Losses due to exchange rates (the bank uses its own rate, not the official one)

The system records all of this in the Transfer Fee field. In simple terms - Transfer Fee is everything that gets “lost” or added on top during a transfer.

Types of Transfer Fees:

1.The fee can:

  • Be added on top
    (sent 1000 → 1010 deducted)

  • Be subtracted from the amount
    (sent 1000 → 990 received)

2. If It’s a Currency Exchange

Here’s the important part:

  • The system calculates the amount using the official exchange rate

  • But the bank actually uses its own (commercial) rate

This creates a difference.

For example - exchange rate difference due to the bank's commercial rate:

  • You want to transfer 1000 USD

  • The system calculates at rate 0.236 → one amount

  • The bank applies rate 0.22 → another amount

The difference = Transfer Fee (hidden bank fee)

Formula (Basically):
Fee = (amount recalculated at new rate) − (amount at old rate)




Another Thing — Exchange Difference

This is a separate issue:

  • Today’s rate ≠ yesterday’s rate

  • This changes the value of money in the account

This is called exchange difference, and it can be:

  • Profit

  • Or loss

Example of Exchange Difference

Previous Entry

  • Account Balance: 50,000 USD

  • Rate at recognition date: 4.310952

  • In accounting: 50,000 × 4.310952 = 215,547.6

Current Money Transfer

  • Transfer Amount: 50,000 USD

  • Rate at document date: 4.233917

  • In accounting: 50,000 × 4.233917 = 211,695.85

Difference: 215,547.6 − 211,695.85 = 3,851.75 → this is the Exchange Difference

The system automatically compares the current amount with the previous balance, and the resulting difference is recorded as Exchange Difference.


Summary

  • Transfer Fee = everything you lose during the transfer

  • Especially important for currency operations

  • Includes:

    • Bank commission

    • Difference due to an “unfavorable” rate

To verify balances in both the foreign currency and the accounting currency, as well as to ensure the correctness of exchange rate difference calculation, please use the Cash Assets Balances report (Money → Reports of money → Cash Assets Balances).

Please note that, depending on your accounting policy, you may independently select the expense GL account used to record costs related to transfers. The system does not impose any restrictions on GL account selection — you are free to use the GL account defined in your accounting methodology. Fr om the program’s side, there are no limitations regarding the choice of account.



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#MoneyTransfer #BankTransfer #TransferFee #CurrencyConversion #ExchangeRate






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