Accounting for International & Local Money Transfers

Because many companies operate as money transfer sub-agencies in the remittance business, not many bother to get into the technical description and understanding of services offered much less delving into the operational details of how remittance transactions are to to be properly catured and recorded in the general ledger.

While Remittance Agencies provide reports, they may not necessarily be in the format required by internal management of sub-agencies, plus there is no way to track and reconcille numbers if reliance is placed soley on the Agency. It's important then that management undertsand remittancce service offerings and how to properly account for them as a check against reports provided by the Agency. 

The types of transfers typically offered by remittance companies, and by extension sub-agencies, are described below: 

Inbound Money Transfer

Inbound is money transfer sent from overseas to be paid locally. e.g. money sent from another country to the country of your residence. 

Outbound Money Transfer

Outbound is money transfer sent locally to any other country, e.g. money sent from country of residence to another country. 

Intra- Island/Country Money Transfer

Intra-island/Country money transfer is transfer sent locally within country of residence, e.g. within cities or from one city to another.

Journal Entries

Here are sample journal entries for accurately capturing remittance entries to the General Ledger:

Payouts from overseas                            

Outra Island/Country Transfers - Dr xxx

Remittance Agency Float -Cr xxx 

Receival/Pay-ins to send overseas 

Remittance Agency Float - Dr xxx    

Outra Island/Country Transfers - Cr xxx

Payouts Inter-Island/Country 

Intra Island/Country Transfers - Dr xxx

Remittance Agency Float - Cr xxx

Receival/Pay-ins to send Inter Island/Country 

Remittance Agency Float - Dr xxx

Intra Island/Country Transfers - Cr xxx

To record commission receivable from Agency Operations

Commission Receivable - Dr xxx    

Agency Commission - Cr xxx

Entry to record receival of commission from Agency

Local Currency Float/Bank/Check clearing - Dr xxx

Commission Receivable - Cr xxx