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Invoice matching problems with foreign currency

Posted on by 85

I have a customer using purchase ledger invoice matching. Ideally they want to set a maximum tolerance as an amount rather than a percentage. As far as I can tell, this is only possible by using the "match price totals" option and choosing either "amount" or "percentage and amount". It does not seem to be possible to use any of the other forms of invoice matching without setting the tolerance as a percentage.

Unfortunately it seems that where the price totals matching option includes "amount", one of the validation checks that AX runs is against the line value in the accounting currency. According to the information at https://ax.help.dynamics.com/en/wiki/invoice-matching-details-page-field-descriptions/ the invoice matching field "Unmatched purchase price total in accounting currency" is determined as follows (emphasis mine):

"The amount of the variance between the cumulative invoice price total and the purchase order price total, in the accounting currency. The invoice price total includes the invoice line that you are working with plus any posted and pending invoices for the same purchase order. The calculation to the accounting currency uses the exchange rate for the invoice that you are currently working with for the invoice price total. The exchange rate for the purchase order is used for the purchase order price total. The calculation uses the exchange rate as of the date that the purchase order line was created. This field is not displayed if None or Percentage is selected in the Match price totals field in the Accounts payable parameters page."

So my customer has a situation where they have placed a purchase order in JPY where their accounting currency is USD. The invoice has arrived and the amount on the invoice is exactly the same as the amount on the purchase order in JPY. However it is failing invoice matching because the exchange rate has moved since the purchase order was created such that the difference between the order amount at today's rate and the order amount when the order was placed, as expressed in the accounting currency USD, is more than the amount we specified as an allowable tolerance.

Has anybody else encountered this situation or found a workaround? It seems fairly insane for invoice validation to fail due to currency movements that the customer has no control over and which do not give them any grounds to reject the invoice. As far as I can tell the only workarounds would be either to turn off the price totals matching (or change to percentage based) or to accept the variance. The first of those options isn't really acceptable. A percentage based tolerance could potentially still be a very large sum of money. The second option creates a significant extra workload.

  • RE: Invoice matching problems with foreign currency

    Hi Sabina,

    The screenshot is from an environment on the following version:

    Installed product version : 10.0.26 (10.0.1192.87)

    Installed platform version : Update50 (7.0.6354.79)

    I don't know in what version this option has been added, ...

  • SabinaF Profile Picture
    SabinaF 17 on at
    RE: Invoice matching problems with foreign currency

    Hi Thomas

    Do you know which version this was released in?

    I have a customer who is on 10.0.24 and are asking for a mod in relation to this so want to be able to let them know which version it was released in (can't seem to find any documentation in relation to it).

    Thanks

    Sabina

  • Suggested answer
    RE: Invoice matching problems with foreign currency

    Hi all,

    We have encountered the same "issue" as mentioned here. We now have the option to select the currency that needs to be used for total matching. Changing following setup to transaction currency gives the expected behavior.

    pastedimage1656490495804v1.png

  • GeorgeB Profile Picture
    GeorgeB 345 on at
    RE: Invoice matching problems with foreign currency

    And that is a frustration.  If the Invoice and Purchase Orders are consistent in their currency, then exchange rates need not be considered.   The management of exchange rates, involving Treasury, taking of cover etc - is a separate issue altogether.   I wish there was a parameter that could make it work this way.   Is is naivete that has us with the current functionality?   Or have I overlooked some other reason?

  • guk1964 Profile Picture
    guk1964 10,877 on at
    RE: Invoice matching problems with foreign currency

    If the JPY price is correct and you will pay in JPY then At the end of the day the difference has to be accepted in the accounts one way or another. The rate will no doubt change again the day you approve payment, cut the cheque, and when the vendor receives the cheque, banks the cheque etc

  • GeorgeB Profile Picture
    GeorgeB 345 on at
    RE: Invoice matching problems with foreign currency

    Consider possibility of customisation to code so that one exchange rate is being used instead of two

  • Andrew Wallis Profile Picture
    Andrew Wallis 85 on at
    RE: Invoice matching problems with foreign currency

    Thanks, both of you for your replies. I agree that given this is standard behaviour, the only options are to either customise it or to use percentage based tolerances. Unfortunately percentage based tolerances may still give allowable variances that are in excess of what my customer considers acceptable if the purchase order is large.

    You've both confirmed my thoughts that there aren't any other ways around this that I've missed.

  • Verified answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 290,186 Super User 2024 Season 2 on at
    RE: Invoice matching problems with foreign currency

    Hi Andrew,

    I do agree with you that it looks insane. But the documentation is clear how the check is performed. I can understand why the accounting currency will be checked. This is e.g. due to possible budget control.

    Or the tolerance should be setup where it could take excessive currency changes into account or like Nuno mentioned you can consider a customization. Setting up the tolerance with a percentage would give a better flow for this compared to an amount.

  • Verified answer
    nunomaia Profile Picture
    nunomaia 10,684 Moderator on at
    RE: Invoice matching problems with foreign currency

    I think in those cases you must create a customisation to consider exchange rates differences in invoice matching, it is an easy customisation but I think you should go that way.

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