Assign Currency to Expense Claim Payer

1

I frequently have expense claims in a currency different from my base currency. These are also paid in the same foreign currency.

There is no problem to record these in Manager, but if the currency exchange rates have changed from the time the Expense Claim was recorded to the time it is paid I will end up with a “balance” for this Expense Claim Payer. This balance is caused by the fluctuation in the foreign currency exchange rates from the time it was recorded to the time it was paid.

The present “work around” would be either of the following, neither that is very attractive:

  1. To always book expense claims in Base Currency (meaning my accounts will not show the accurate situation);
  2. Only to record expense claims at the time they are paid (meaning I will not have a true accrued view of my accounts); or
  3. To make a journal entry to remove this “foreign currency balance” after each time I pay an expense claim (very “messy” if you have many expense claims and also these Journal Entries needs to be updated if and when you update your “Exchange rates”)

The “real solution” to this is to be able to define the currency for each “Expense Claim Payer” in a similar way like we today define currency for each “Customer” and each “Supplier”. Manager would then automatically handle these situations and move whatever balance to the “Foreign Exchange gain (loss)” account.

2

Who are these expense claim payers? Are they employees?

3

We don’t have employees in the legal sense of the word. They are “partners”….

I have temporarily solved the problem by removing all these expense claims and "re-entered’ them as “Purchase Invoices” from these partners… I can then use the correct currency and all works fine…

4

Yeah, that will work too. I need to re-think the concept of “expense claim payers” altogether. I never liked that part in Manager. There are some upcoming features which might make expense claim payers redundant and the alternative will solve this issue.

5

It sounds like you are using the term partners when you really mean subcontractors, not actual owners in a partnership agreement. Is that correct? If so, purchase invoices are the correct approach, because from an accounting perspective these are suppliers invoicing you for their expenses. (I assume they are also invoicing you for their services.)

On the other hand, if your partners are legally partners, then expense claims are appropriate, and the resulting liabilities can be cleared either through direct reimbursement or via journal entries by treating them as equivalent contributions of capital.

6

@lubos, I would recommend you outline the nature of the change you are thinking about for expense claims before beginning to implement it. Solicit some feedback in advance, because I think there are a great many users who find the module extremely useful as it currently is.

If there are aspects you don’t like, you might explain your concerns and see if they are shared by the user base.

1 Like