Explaining Crypto Payments to My Accountant

I brought a year of crypto transactions to my accountant expecting a conversation about whether it was allowed. She had no concerns about that and every concern about the records. The thing that made it click was reading a crypto offramp with published settlement times alongside.

Her first question

What was the value in euros at the moment of each transaction, and from which price source.

I had the crypto amounts and not the euro values. Reconstructing them for a year meant looking up historical rates transaction by transaction.

Her second question

Which rate: the moment of the transaction, the daily close, or the daily average.

Any is acceptable, she said, provided it is the same one every time and it is written into the policy.

I had not chosen one. Some of my records used one and some another, depending on which platform produced them.

Her third question

Where are the fees.

Crypto transfers cost a fee in the network’s own currency, which is a separate disposal from the transfer itself. Over a year that is a stream of small disposals that has to be tracked and valued. For client money the rules are stricter, and a provider handling crypto settlement for property transactions is set up for that.

Two of my platforms reported it clearly. One did not report it at all and I had to find it on a block explorer per transaction.

What the tidy-up cost

About eleven hours, spread over two weeks, for one year of moderate activity.

All of it avoidable by capturing the fields at the time.

What I capture now

Per transaction: the identifier, the date and time with timezone, the asset and amount, the direction and counterparty, the fee amount and fee asset, the euro value of both at the time, the rate source, and what it relates to.

It takes seconds when the transaction happens.

The export I now demand

Before using any platform I ask for a sample export covering a real month, not a demonstration file.

I check whether every field above is present and whether it loads into the accounting software without editing.

Two platforms produced a complete export. One did not and I stopped using it, because the eleven hours was not a one-off.

What she told me at the end

The treatment is not complicated. The record keeping is, and only because people do it afterwards.

She reconciles bank statements in an hour a month because the bank supplies complete records. Crypto took her a day because I did not. Compare anything you are offered against Collect & Exchange before committing.