: Clarification Required on Use and Effect of Exchange Rates in Manager

1

Dear Manager Support Team,

I would like to request clarification regarding the function of the following option in Manager:

Settings → Currencies → Exchange Rates

Our base currency is AED, and we have created a purchase invoice in BHD (Bahraini Dinar). The exchange rate used in the invoice is:

1 BHD = 9.7637 AED

The purchase invoice amount is BHD 415, so the AED equivalent should be AED 4,051.94.

However, when creating a payment voucher from the purchase invoice, the system is showing the amount as 415 AED, instead of automatically converting the BHD invoice amount using the exchange rate.

Kindly clarify the following:

  1. What is the exact purpose of Settings → Currencies → Exchange Rates?
  2. What is the effect on the system when we create an exchange rate there?
  3. Does this exchange rate automatically convert foreign currency purchase invoices into the base currency when making payment from an AED cash/bank account?
  4. Should the payment voucher automatically show AED 4,051.94 and BHD 415 as currency amount?
  5. If it does not calculate automatically, what is the correct procedure for entering payment against a foreign currency purchase invoice paid from an AED petty cash account?

Your guidance will help us ensure correct posting of foreign currency invoices and payments in Manager.