- Receipts must have the same currency as the client invoice currency.
- Payments must have the same currency as the vendor invoice currency.
- When a receipt or a payment with a certain currency and exchange rate is applied and posted to an invoice for the same currency and a different exchange rate, this will create a realized gain or loss. The General Ledger holds debits and credits in both transaction and home currencies. When posted, debits and credits are converted to home currency, any rounding error will generate the posting of an entry in the General Ledger in order to balance the transaction both in the transaction and home currencies.
- The same goes for credits applied to invoices, or advance bills applied to invoices.
Voiding an Invoice vs. Applying a Credit Memo.
Void - if the intention is to void the original invoice as is and retain the currency rates, then Void the invoice. The Void will set the currency rate to the original invoice rate. There would be no Realized Gain or Loss difference.
Credit Memo - if the intention is to offset the amount owed, a credit memo applied to an invoice will be based on the current rate of the Invoice Date on the Credit Memo. This may cause a Realized gain/loss.
NOTE: Sales tax may post into the Sales Tax account at one rate from the original invoice. A Credit Memo may cause a difference in the Sales Tax reversing out if the Credit Memo has a different currency rate.
Select the currency on the Client Invoice screen. If the Client Invoice is linked to a project, the Client Invoice must be in the same currency as the project. The AR Account must be in the same currency at the currency of the invoice.
Related Projects, Receipts, Credits, and Advance Billings must be in the same currency.
The cash account must have the same currency as the receipt. The invoices applied must have the same currency as the receipt currency.
When posting the receipt, and when different exchange rates apply, a realized gain/loss will be posted.
Realized Gain = Amount Applied * Difference between Exchange Rates = 1520 CAD * (0.757 - 0.739) = 27.21 USD
Similar to receipts.
The cash account must have the same currency as the payment.
Note: If you have open Vendor Invoices for payment in Foreign Currencies, the To Pay As Of amount will be based on today's exchange rates in the company exchange rate table. For example, if I have a 2,000 EUR Vendor Invoice due: EUR 2000 * 1.1395 (currency rate) = $2279 USD. The To Pay As Of on the Today Purchasing will show the amount $2279 as the HC Amount due.