Currencies

Support multicurrency accounting

Currencies - need to know

Before you can start using the system, you must choose a base currency i.e. USD for your General Ledger.
You can set up multiple currencies and their exchange rates relative to your base currency. For example $1 USD = $1.41 CAD.
When you create a new Customer or Supplier master you must select a trading currency from the List of currencies you’ve preset.
New trading partner masters will default to the base currency if you omit to select a currency. You cannot change currency on a ‘trading partner’ master.
If you accidentally set the wrong currency on a master, you should delete the master and start over. If you create new Documents from this master, they too will need to be deleted and re-entered.
Documents created directly from their respective customer or supplier masters will inherit their currency and exchange rate from parent master.
Documents created from other Documents will by default inherit the system exchange rate. The rates on all Documents are editable.
You can configure Cash Sales and Sales Invoices to inherit the rate specified on the original Sales Order (See 11).
The multicurrency function enables you to:
  • Setup any base or trading currency, set foreign exchange (FX) rates
  • Setup foreign currency bank accounts to track FX deposits and transactions
  • Trade with Customers and Suppliers in multiple currencies
  • Track accounts receivable and payable balances per currency
  • Track cash that is and is not deposited into bank accounts
  • Make currency adjustments for gains and losses resulting from currency exchange rate fluctuations
  • Fix Item pricing and costs in foreign currencies
  • Report on base vs fx on sales and purchase-related transactions
  • Report on specific currency transactions
  • Edit Document Exchange Rates.
  • Force Sales Order rate to be inherited by Cash Sales and Sales Invoices.

Add a new currency and set up the exchange rate

Accounting>Multicurrency>Currencies>+
Set the exchange rate for the new currency. For example, 0.79 GBP is 1 USD, where USD is your base currency and GBP is the new currency.

Payment Defaults for Currency

You can set default bank accounts for incoming and outgoing payments in the corresponding Currency settings.
If you are setting up your system for the first time: Do this step after you have set up your Bank accounts and payment processor(s) and payment gateways.
The 'Payment Defaults for this currency' section only appears after you have completed the currency exchange setting. Drill down on the new Currency in the Currency List and edit the fields.

Default Bank Account for payments from Customers

Choose a Bank account with the same currency.

Default Bank Account for payments to Suppliers

Choose a Bank account with the same currency.

Default Payment Processor

Choose a Payment processor or gateway that accepts the same currency.

Setup foreign currency bank accounts to track FX deposits and transactions

You can create Bank Accounts to hold a foreign currency:
Banking>Bank Accounts>+>set the Currency field
You’ll need to set up the currency first before it will appear in the currency field dropdown. See 1. ‘Add a new currency and set up the exchange rate’.

Trade with a customer or supplier in a currency different to your base currency

Customers>+
New Customer> set ‘Currency’ field
Suppliers>+
New Supplier> set ‘Currency’ field
You’ll need to set up the currency first before it will appear in the currency field dropdown. See See 1. ‘Add a new currency and set up the exchange rate’.

Track accounts receivable and payable balances per currency

When you create a new currency, the system automatically creates four new accounts in the general ledger (Chart of Accounts). These are:
  • Non-Deposited funds (Current Asset)
  • Accounts Receivable (Current Asset)
  • Accounts Payable (Current Liability)
  • Opening Balances (Equity)

Track cash that is not deposited into bank accounts

When a currency is created, the system automatically creates a new account ‘Non-Deposited funds’ in the respective currency. This is a default account for incoming payments.

Currency adjustments for gains and losses

As currencies fluctuate relative to your base currency you’ll need to make currency adjustments to record the gains and losses. A Currency Adjustment revalues transactions posted to sales, purchasing and bank accounts. Gains and Losses are recorded in the Currency Gains/Losses account in the Other Income and Other Expense part of the Profit and Loss.
Except for the base currency, you’ll need to make a currency adjustment for each currency in use. To make a currency adjustment:
Accounting>Multicurrency>Currency Adjustments>+
>Choose currency - the currency to adjust
>Enter exchange rate - the value of the rate vs your base currency
>Click ‘Proceed’
The system will display a list of accounts, their respective current balances, gains, and losses and what will be the new balance ‘after the currency adjustment.
Now set the Date, add a memo to the accounts then select the accounts you want to adjust. As you select each account, the system will sum the balances of the adjustments and display the ‘Total adjustment’. Click Save.
The Currency adjustment will be added to the List, and the Gains and Losses accounts will be updated.

Fix Item pricing and costs in foreign currencies

When trading with Suppliers and Customers, Currency fluctuations affect your costs and pricing on posting and non-posting transactions. This is because the exchange rate on each transaction is inherited from the parent Customer or Supplier.
This inherited value will affect the transformation of a unit cost or a price derived from the respective Item values in your base currency. This multiplication can result in a number that can confuse customers and users and frustrate the sales or payments collection process.
On each Item master, there are on the Sales and Purchasing tabs, Foreign price and Foreign cost fields. Use these to fix the price or cost in the selected currency. This foreign price or cost will be used on transactions with the same currency setting.

Report on base vs fx on sales and purchases

On standard reports, you can set the following currency columns to display:
  • Currency
  • X Rate
  • Debit FX
  • Credit FX
Click to enlarge

Report on specific currency transactions

On standard reports and where it is relevant i.e. Sales by Item, you can set the Currency filter to display a report for transactions in the selected currency (see above).

Edit Document exchange rate

New Documents will always inherit the system exchange rate set at the time. You can edit this rate on all Documents.

Force Sales Order rate to be inherited by Cash Sales and Sales Invoices.

If you need to have Cash Sales or Invoices not take their rate from the system, but inherit the rate specified on the original Sales Order, you can preset this behavior on the Sales Order.
Go to Sales Order>Configure>Creating Invoices/Cash Sale>, and set ‘Do not inherit xrate’.