Basically the headline.
I am trying to figure out how to settle international payments for both suppliers and customers in my INR account. What should the chart of accounts look like? And how exactly would you configure your price lists and items so that it auto-sets the conversion rates and settle the amount fairly?
Best.
For an Indian company with INR as the company currency, use ERPNext’s standard Multi-Currency Accounting.
Keep the INR bank account as an INR Account.
Create foreign-currency Receivable/Payable accounts for USD, EUR, etc.
Set the Customer/Supplier currency accordingly.
Maintain USD/EUR prices through separate Price Lists + Item Prices.
Use Currency Exchange / transaction exchange rates for USD → INR conversion.
Use Payment Entry to settle the foreign invoice against the INR bank account.
Any difference between invoice rate and settlement rate is handled as Realized Exchange Gain/Loss.
For outstanding foreign receivables/payables at period-end, use Exchange Rate Revaluation for unrealized FX differences.
So the flow is basically:
Foreign Invoice → Exchange Rate → Payment Entry → INR Bank → Exchange Gain/Loss
ERPNext handles the accounting conversion; the actual exchange rate should come from your approved bank/finance rate rather than trying to make the Item/Price List handle settlement.
So we also create a separate account for Exchange gain and loss?
I recently came across an invoice amount mismatch due to a rounding error, which i doubt originated from currency conversion. Precisely difference of 0.93INR while settling the invoice with a PE. Where do I write-off this amount?