Foreign Currency Transacting

Key Concepts

To conduct foreign currency transactions in BOSEnterprise, the following is required:

• Additional Transactions Types 

• All Transactions linked to the Bank must be in Bank Currency

• All Transactions linked to the Customer or Supplier must be in the Customer or Supplier Currency or Local Currency.

• Additional Accounting Settings to convert back to the local currency

• Use of a fluctuation Rate of Exchange (RoE)

• Multi-currency - For more information on General Settings for Multi-Currency, click here.

Transactions Types & Settings

Transactions Required 

• Customer Forex Gain (CFX+) 

• Customer Forex Loss (CFX-) 

• Supplier Forex Gain (SFX+)

• Supplier Forex Loss (SFX-)

Transaction Settings (All Customer / Supplier Transactions)

• Accounting

  • Currencies = Company and Local (Edit RoE)

Accounts & Settings

Account/s Required

Navigation: Main Menu > Setup > Accounting > Accounts.

• Forex Gain/Loss Account (Expense or Other Income)

Bank Category

Navigation: Main Menu > Setup > Accounting > Accounts.

• All Bank Accounts should be linked to the relevant Currency (ex. Bank - Local (Currency = Local); Bank - USD (Currency = USD))

Customers / Suppliers 

Navigation: Main Menu > Office> Customers / Suppliers > Accounts tab.

• VAT Type = Standard / Exempt

• Currency = Select the Currency to transact in

Items and Pricing

Navigation: Main Menu > Items > Items 

Costing & Pricing

Supplier Prices

• Multiple Supplier Prices can be added in different Currencies. Set the CUR field to the Currency that the Item was purchased in.

• Additional fields (hidden by default)

  • RoE Override = Enabled when RoE should not auto-update

  • RoE X = Rate of Exchange 

Pricing

• Multiple Prices can be added in different Currencies. Set the CUR field to the Currency the Item is costed and sold in.

• Use the Cost Adj % field to factor in Landed Costs and Cost fluctuations (ex. 15%)

Creating a Transaction

Default Transaction Currency = As per Customer / Supplier currency selected.

Items can be added to the Transaction in various Currencies.

The RoE and Currency can be managed on a Transaction basis. See the Currency and Rate fields in the footer.

Additional Fields (hidden by default)

• Total CUR

• Total CUR (inc)

Ledger

Navigation: Main Menu > Accounting > Ledger.

The Detailed Ledger can be viewed in Local and Foreign Currencies.

Select the Customer / Supplier account > select a Currency from the CUR dropdown to see various views.

Allocating Receipts and Payments

Scenario 1 - Recommended

This guide is applicable if a Bank Account is created for each Currency transacted in.

1. Once a Customer Receipt (CR) is allocated, a left-over value is unallocated. Record the Forex Gain or Loss. In the Outstanding section > click on Menu > Record Forex Exchange Gain / Loss.

Scenario 2 - Accrual required

This guide is applicable if the Customer is invoiced in Forex, but the Customer pays into a Local Currency Bank Account. 

Requirements:

1. New Account = Accrual - Forex 

   • Category = Current Liabilities

2. New Transaction Type = Forex Receipts 

   • Accounts Setup

     • Dr Bank; Cr Accrual - Forex 

   • Transaction Setup

     • Items & Inventory

       • Item Type = Default Item

     • Accounting

       • Accounting = Enabled

       • Currencies = Local Only

       • VAT Type (Default) = No VAT

Steps - Receivables

1. Create a Forex Receipts transaction (Dr Bank; Cr Accrual - Forex )

2. Once the Customer pays, create a Customer Receipt (Dr Accrual - Forex; Cr Receivables) and allocate it to the Customer Invoice. A left-over value will stay unallocated. Record the Forex Gain or Loss. In the Outstanding section > click on Menu > Record Forex Exchange Gain / Loss.

3. Create a General Journal (GJ) to clear the accrual account (Cr Accrual - Forex; Dr Forex Gain/Loss).

Steps - Payables

1. Create a Forex Payments transaction (Dr Accrual - Forex; Cr Bank)

2. Once the Supplier is paid, create a Supplier Forex Payment (Dr Payables; Cr Accrual - Forex) and allocate it to the Supplier Invoice. A left-over value will stay unallocated. Record the Forex Gain or Loss. In the Outstanding section > click on Menu > Record Forex Exchange Gain / Loss.

3. Create a General Journal (GJ) to clear the accrual account (Cr Forex Gain/Loss; Dr Accrual - Forex).

Fixing Accounts that have mixed currency transactions

Old Period

• Close and Zero Account - Last day of the old period

• Close-off Forex account - Contra Accruals

• Close-off Local account - Contra Accruals

New Period

• Create a new Account with an Opening Balance (day 1 of the new period)

• Change all transactions post-changeover to link to the new Account. 

Related Topic 

BOS Server - RoE Updates

The history of the RoE can be viewed in QuickEasy by navigating to the Main Menu > Setup > Settings > General Setting = Currencies > Click Edit (Value column) > History tab.