2,095
Dear ,
I am having an invoice which was in Euro amount 500 and the equalant amount $ 800 (Example) i entered in the GP purchasing module , but when i transfered the amount through bank the bank will deduct from our bank account usd 850$ which is 50$ more than payble so how will adjust the difference while making payment in gp as well as to apply with payble amount ($800).
I will appriciate your kind help on this matter ..
Rashed
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Hi,
Why can't you enter an invoice in Euro?
You can have a USD functional currency (as you have), but enter transactions in any originating currency once a exchange table exists with a valid FX rate.
Are youentering any transactions in Euro's? If not,then you are not using Multicurrency, and will have to process a manual adjustment to take account of the FX gain or loss (ie post a credit or debit note to the vendors account).
Can you confirm if you are using the multicurrency module?
Can you confirm what originating currency you are using to record both the invoice and the payment (USD or Euro in each case).
Best regards,
Hi Ian
Thank you for your kind reply .
First of all our functional currency is US$ and not Euro. So I can’t enter any invoice in Euro currency.
Secondly no one sure about the frequent change in currency exchange rates. And if I don’t want to make payment of any euro invoice, at least I should have to enter in GP to create payable in respective month. I can’t delay to create payable in GP. So at the time of payment there is a chance of change of exchange rate. Then how I can estimate exactly equivalent amount of $ to Euro?
B. Regards
Rashed
Hi Rasheed,
You need to enter a Euro payment of 10,086, and apply this against the euro invoice of 10,086.
When you enter the payment, make sure the rate you use results in a dollar amount of 14,521.
GP will understand that you are clearing the original invoice and will automatically calculate a curency FX exchange Gain or Loss when you apply the payment. Once your default posting accounts are set up, the whole process will be seamless.
As noted above however, the actual amount taken out of your account in dollars may include a transaction fee. This technically has nothing to do with the transaction. You could however impute a rate that translates the euro amount back to the dollar amount including this charge. While not correct accounting procedure it does avoid entering two transactions (harder to reconcile your bank account - 2 transactions in GP matching one transaction on your bank statement).
Best regards,
In invoice value is Euro 10,086 and I entered this invoice in May-09 equivalent to US$ 13,821/- in vendor account in GP. But when I made the payment against this invoice, our bank deduct $ 14,521/- from our account against Euro 10,086.
Now the problem is,
I have to credit my bank with $ 14,521.
I have to debit payable with the same amount which I have already entered in GP e.g. $ 13,821.
Then how I will debit/adjust the currency exchange difference (loss) in vendor a/c during making payment?
And if I will debit currency exchange loss with $ 700, then how I will apply total amount $ 14,521 against payable $ 13,821? Because after that system still shows un apply amount of $ 700.
All this procedure from transactions-purchasing-manual payments-distribution-apply.
Thank you
When you say you transferred it through the bank, what does that mean? Did you write a check? Did you wire the money? I am guessing that this hasn't "cleared" yet. If you are entering the wire payment in Euros and your functional currency is USD, then it is probably converting that 500 euros back to USD at a different exchange rate then when you entered the bill in Euros. Do you know how to check and see what exchange rate it used?
This is where I get a little lost, but there is a gain or loss on currency involved when you enter transactions at one exchange rate and then pay when the rate is different. In terms of your difference on the subledger, it should work itself out if you have multicurrency set up properly. Because that invoice was in Euros, and you are always converting it back to 500 Euros. A month ago, it might have been 800 USD. Today it might be 850 USD. A month from now, depending on what the rates do, it might be 750 USD. But the subledger should have it in Euros - 500.
Anyone feel free to correct me if this is not the case.
Rashed, is the extra $50 a bank service charge? If so, it has nothing to do with currency conversion (except they're charging you for it) and should be recorded separately as a bank fee.
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