Description

In order to pay Bills with crypto, it's best to follow a 2 step process to ensure the Bill is cleared out of Accounts Payable and the crypto transaction is recorded.


Example


Let's walk through an example where a 100 USD vendor Bill was entered into Accounts Payable and approved, then the company chose to pay in BTC:


1) Create a Manual payment and select a clearing account as the Ledger Account (e.g. Crypto Payments).  The following Journal Entry will be created.


Dr. Accounts Payable   100 USD

       Cr. Crypto Payments   100 USD


2) Create a Crypto Withdrawal to record the BTC payment and select the same Ledger Account you used in #1 above.  Based on fluctuations in the market value of BTC, the amount sent is now worth 98 USD and the cost basis for the BTC is 80 USD.  The following journal entry is created:


Dr. Crypto Payments    98 USD

        Cr. BTC Asset           80 USD

        Cr. BTC Gain/Loss    18 USD


These 2 steps will ensure you've completely offset the Bill in Accounts Payable, the Crypto Asset payment is reflected appropriately, and any gain or loss on transacting in crypto is captured as well.  In this case, you made 2 USD on paying with BTC (as you settled a 100 USD obligation with only 98 USD worth of BTC).