Correct Accounting for Foreign Exchange


I need to make a payment to a supplier, but in order to do so, first I need to buy US$ cash and then deposit it to Bank to make payment. Usually, in my country, Bank doesnt sell, so I have to buy from a different source at a higher rate than fixed exchange rate, which causes exchange loss.

In desktop edition, I use cash transfer button and gain / loss happens automatically. This is no longer available in Cloud edition. So I have used Interaccount transfer to do this from my Cash on Hand (local currency) to my Cash on Hand (US$).

Now I see a suspense under Equity. See below screenshots.

How do I fix this? And what’s the best accounting way to do this?

Thanks a lot for your help

On the Summary tab - P&L - Income, do you have a 0000000 Bug 1 account showing ?

Also, if you click on the Suspense account “View” button, what is displayed ?

Inter account transfers work exactly the way the Transfer money function used to. They are just in a different tab. For the foreign exchange gains/losses to be calculated automatically, you must have accounts defined in different currencies. So if you are going to sell cash in MVR to buy cash in USD, you must have two cash accounts, one denominated in each currency.

But you cannot deposit USD into an MVR bank account. So you must create a USD bank account, even if this just means your bank holds USD for you in the same account as it holds MVR (which would be unusual).

This is not a transaction on which Manager will see or calculate an exchange loss. You simply have a different rate for this purchase transaction than for other transactions. The gain or loss will occur when money is in an account in one currency and the exchange rate changes so that account now becomes worth more or less in your base currency or when it went in at one rate and comes out at another.

As for the Suspense account, that means you did not properly complete a transaction. View it as @Brucanna suggests and edit the transaction so it is correct. What to change will depend on what was incorrect or missing.

Which is what they have setup, as illustrated in the Inter Account Transfer.

But I suspect, that the “View” will only show the Inter Account Transfer (which has already been posted) so there will be nothing to edit as the foreign exchange is a control account function.

For Suspense to receive a control account posting, implies the control account is not existing/functioning.

@vozel - when you say " In desktop edition, I use cash transfer button and gain / loss happens automatically", does this mean - that doing this transaction in Desktop - Money Transfer it works okay but when doing the same transaction in Cloud - Inter Account Transfer it doesn’t work ?

Yes, I saw that. My first paragraph was only background for the point in my second paragraph about not then being able to put the USD into a MVR bank account.

I suspect you are right. If so, that will start the process of tracking down what is wrong or missing.

Exactly, hence my remark that “what to change will depend on what was incorrect or missing.” Something is not making sense. But @vozel seems to be comparing current behavior of the cloud edition, which we know is up to date, with an older desktop version of unknown vintage. We’ll see what the answer is to your question.

thanks both for your replies.

yes, it works fine in the old “Transfer” method in cash accounts.

@tut - currency in cash account is correct. I’m transferring from a RF account to a $ account.

@Brucanna - suspense is under Equity

I’m reposting the screenshots again for your clarity.


So can this be a bug? because in old transfer method, if it works correctly - it should work fine in the inter account transfer too right?

Thanks guys!

I am using V17.9.69 with Inter Account Transfer (new system) and get the correct result

It makes no difference if I use bank accounts or cash accounts I still get the same correct result.
Can I suggest that you delete the transaction, close Manager, re-open Manager and re-enter the transaction and see what occurs.

EDIT: Just upgraded to V17.10.15, deleted and re-created the transaction and all is okay as above.


I’m using Cloud version: Manager 17.10.15

I tried what you suggested:

  1. Delete the Inter-Account Transfer
  2. Log out
  3. Login
  4. Re-do the Inter-Account Transfer

It’s still the same. Suspense under Equity


so can this be something to do with the Cloud version?

I have not tried it on a Desktop upgraded version yet.

Possibly !!

I doubt it very much. Can you post a screen shot of the entry screen for the transaction itself? Everything else you have posted shows various results of the transaction.

@vozel - For the Suspense account, can you click on the “View” button and post what is displayed.
0000000 Bug 6

There cannot be a difference between desktop and cloud edition because both editions are running the same code. The difference will be in version you are running, not edition.

Anyway, I’m able to reproduce this bug. It seems like, in newer versions, if the only foreign currency accounts are cash accounts, then foreign exchange gains or losses would be incorrectly posted to Suspense.

This now fixed in the latest version (17.10.20)

thanks @lubos

its fixed now. Great support! Much apprecitated