I have the following scenario.
Company Account is in USD.
A multi-currency Purchase Invoice was done. Invoice is in done in SGD, let’s say 100 SGD to 84 USD
A few months later, we need to do a return. The exchange rate is now different. The return should still be 100 SGD but in USD, it is 82.
How do I capture the difference of 2 USD. I understand there is a write off account but this isn’t a write off but foreign exchange difference.
There are 2 issues.
The exchange rate did not change based on document date
There isn’t a foreign exchange difference section
Appreciate your help. And if this is a bug, please inform me so I cant put on GitHub.
I am thinking 2 approaches
there is an account named something like “currency gain/loss”. So writing the difference off to that account would be different then writing it off to 'writing off" account (sorry not aware of the exact terms at the moment but they must be similar)
find a way to force the system to use your own defined exchange rate (>setup >currency exchange) rather then an automatically fetched rate
I am (due to a different problem) trying to figure this (#2) out for myself at the moment and can tell you more later maybe
Thanks for the reply!
Actually a different exchange rate is a no-can-do, which pose a significant and valid issue.
As such, we are unable to do a write off as the GL will not be balanced.
is the payment (and return) executed from a bank account (or cash) your base currency USD or the working currency (SGD)?
Wouldn’t returning the same SGD amount AND writing off the sxhange rate gain/loss in the gain/loss account be the solution you need?
Payment and return is using working currency.
It is returning the same SGD amount but you see, the USD amount will be different due to the exchange rate.
While using the write off is OK on the surface, you have to manually calculate the exchange difference, which defeats the purpose of having an ERP, especially if the transaction involves tax (another pain point).
can it be related to the currency of your a/p account u use (assuming there is a purchase invoice involved)?
is that a/p account in USD or SGD (as the payment & PINV)?
The a/p account is in SGD, the same as invoice.
Scenario is - I purchase 100 SGD, which is 97 USD.
One month down the road, I return it due to defect and got back my 100 SGD, which is at 96 USD now.
As such, in company currency, the company made a lost of 1 USD.
I have to:
- Calculate the USD based on current month exchange rate
- Calculate the difference between last month and current month (in company currency)
- Book the difference via journal entry
Nonetheless, to do a Credit Note/ Debit Note based on the exchange rate of Purchase Invoice, instead of current document is conceptually inaccurate. The amount in company currency will definitely be different.