Dynamics Community Forum Thread Details

Multicurrency bank accounts and differing exchange rates

We are setting up a client with a new install of GP2010 and have encountered a design issue.

The client has a USD bank account, however they can make payments directly out of the account in other currencies, such as Euros. When you generate an EFT payment in GP in Euro’s, GP will convert to USD (functional and bank account currency) at whatever the stored exchange rate is. When the payment is made from the bank, the bank will convert to USD at whatever their exchange rate is. This raises the following issues:

1. Transactions will not match when doing the bank reconciliation.

2. Is there any way to update the exchange rate for posted transactions?

3. Is there any way when booking the differences to ensure that the original income/expense line is affected rather than an Exchange Rate Variance account?

Has anyone else encountered this problem before and has a solution or third party product to handle this?

The issue can be solved fairly straight forward or can be complex depending upon the organization's controls are setup.

For us, if we initiate a foreign currency payment from our USD account, then our bank provides the rate to us when we create our foreign exchange contract with them. GP allows in Payables at the time of entering manual payments to update the exchange rate for that given payment to the rate agreed upon with the bank. This forces the payment amount to equal what the bank withdrawls from the bank account.

For A/R though, GP is not as friendly (no idea why Payables is designed much easier than Sales, but it just is). Once the bank receives the foreign currency funds, we agree to the rate through a foreign currency exchange contract. The USD funds are then put into our account. I have to (1) update the Multicurrency Exchange Rate table to the contracted rate for that given day, (2) enter the cash receipt at the A/R level which uses the rate just input which ties to cash deposited by the bank, (3) perform the bank deposit which also pulls in the exch rate updated, (4) remove the exch rate from the Multicurrency Exchange Rate table.

The problem is that I need to ensure no one is working in sales at that time because I do not want that rate to be picked up. So, my options are to request everyone stop working in GP for the sales module or do the steps when no one is in the office.

The organization you are working with may have to review their processes to know how many people need to be involved to get the cash received/paid to reflect the exch rate the bank used so the bank reconciliations can be done without having to create adjusting entries during the bank reconciliation which I would think would cause audit issues.

I wish Microsoft would focus on these issues so the process is more productive,less time consuming, and can work for companies that have strong internal controls, but foreign currency area is not GP's strong suit, so I don't know if Microsoft will ever realize this, focus on it, or fix it.

Best regards,

Dale

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