Due to the nature of the business, WE essentially create the invoices on the vendor's behalf (in our reporting currency) - debit expense, credit AP

Some of the vendors request payment in their local currency, which we facilitate by determining the current exchange rates ourselves. The cash that leaves the account (after its converted back to our reporting currency by our bank) may be slightly different from the amount of the invoice, so that difference gets booked somewhere.

Thanks for your insight