Currency Issues Displaying Wrong in Profit and Loss

[MVE]

Ok here is the Problem.
My Business is in Australia so primary Currency is AUD, I purchase some things from USA so those suppliers I mark as USD. I haven’t noticed any issues until I was running a Profit and Loss and noticed I was making a lot more than I thought I was. after going back through every transaction I noticed this was the issue…

In the Purchase Invoice below it does not say that I was purchasing it in USD, but when you click on EDIT you can see in the second Photo that it is in USD not AUD.
In the third Photo you can see the entry for the Profit and Loss for the period covering the transaction showing the cost of the item that was sold to the Customer. but it is the USD amount not the AUD amount

The Last 2 photos show the Payment for the Purchase invoice showing that the correct amount was entered in AUD as well as USD.
How do I fix this? As I have just had to pay a TAX Bill based on my profit which is now Hundreds of $$ less than what I reported.
PLEASE HELP

[Tut]

You have not furnished enough information to see that there is any problem. We have only your statement that “I was making a lot more than I thought I was.” What was your basis for thinking you were making less? And are you using accrual or cash basis accounting, which could can account for huge differences?

[MVE]

In the final picture you can see that the amount of AUD $347 is what it cost me for the purchased item NOT $261.
But my Profit and Loss shows that the cost of the item I sold to the customer was only the AUD $261… but this is the USD amount.
This ment that I supposedly made and additional AUD $86 on that sale. So if I had sold the item for AUD $447 (making a $100 profit $447-$347) my Profit and Loss report said that I actually made AUD $186 ( $447 - $261).
I hope this note makes sense.

[AaiRIz]

For solving this, In your Purchase invoice you have to add all the amount what you actually pays. you can also add freight-in into that,… for more details go through guide. if also not get the answer then write here back, I will try to solve out your issue with the pictures.

[Tut]

@MVE

But my Profit and Loss shows that the cost of the item I sold to the customer was only the AUD $261… but this is the USD amount.

I assume this is a typo and that you mean AUD $269.10. Can you show where you see this in the P&L? So far, you still haven’t shown any error. And you didn’t answer my question about cash or accrual basis accounting.

[Brucanna]

Under Settings - Exchange Rates, what rate have you got set up ?

[MVE]

Cash Basis
Third picture (thin single line entry) shows the P&L entry of 261.10 (which is a USD amount , it should read $347 the AUD amount.

[MVE]

The second picture shows the entries accessible in the purchase invoice there is no place to show the AUD amount payed. In the last picture you can see the payment for the transaction.
I don’t know what else I am ment to show everyone. All the entries are there in the photos.
Thanks for your help so far

[MVE]

I have entries for the exchange rate in that settings area.

[Tut]

@MVE

Third picture (thin single line entry) shows the P&L entry of 261.10

I cannot figure out where you imaged this single line. It isn’t from a profit and loss statement. Nor is it from a cash account register. Please describe what you did to display that image, and post a bigger portion of it so we can see what the headers are.

I also note that you paid your supplier by credit card, and in the same transaction paid a transaction fee. Surely you did not pay the transaction fee to your supplier. You should have a separate transaction for the bank charge.

As I puzzle over this, I wonder whether you have changed your currency settings since December of 2016. The reason I ask is that your finished forms show only the $ symbol. The program will do this for dollar currencies, but only when a single dollar currency is used, whether that is AUD, CAD, USD, or whatever. Once you use more than one, it will show national prefixes. But generally, past invoices are not changed. So I am wondering whether entries were made and only later was the base currency set. Something is definitely not making sense based on what you have shared so far.

[MVE]

This first photo shows the Profit and Loss
The Second Photo Shows Inventory Cost break down of A$269.09 (which is actually US$269.09
The Third Photo shows the deposit into my bank account for the person I sold it to.
The Fourth Photo is the Currency entries in the Settings. (but I also thought as long as you entered the actual cost into the invoice area that it works out the conversion for you anyway?)

[MVE]

Any updates please.

[les_langford]

Whilst you are purchasing the item in USD, because that is where you are buying from, if you are using your bank or FOREX dealer to supply the USD you are actually paying for it in AUD. We were shipping in from the US, Italy and the UK and going through FOREX on a TT and paying the amount at the rate given by them in AUD.

[Brucanna]

@MVE, I can’t replicate the problem, by this I mean that $US created purchase invoice end up in $A not $US

1. Create the purchase invoice - edit mode

2. Create the purchase invoice - view mode

3. The Inventory Item after the purchase invoice creation is:

4. You will now note that the value is in A$ based on your Exchange Rate for the 19/12/2016

So for now (ignoring payments, sales, P&L etc) what does your Inventory Item display at this point. If it doesn’t match the above then here lies the problem.

5. When you click on the Inventory Item’s blue balance part of the display should look like this

Can you post a screenshot of the YTHPRS Inventory Item after clicking on the balance which maybe a dash symbol now, as the item has been sold.

[MVE]

Here is the inventory entry

Here is the inventory Item

Here is the Seller/Supplier showing that they trade in US$

Thanks for looking into this. I would think that others would be getting the same issues?

[MVE]

What is odd is when I clicked on the Total Cost column in the inventory Items page. I get this…

Now when I look at my profit and loss for the day that I purchased and payed for the item (19/12/2016) I get this…

If I then click on the inventory cost value that you can see is 269.09 I get this.

What is interesting here is that it is showing it as AU$269.09 ( should be either US$269.09 or AU$374.36)

If I click on the Suppliers Purchase invoices I get this.

and then drill down on the Balance Due of $0 for the 19/12/2016 and I get this…

Which clearly shows the AU$ and US$ amounts.

This is doing my head in.

I think in the future I will wait until i get the final bill from the Bank and just enter the values in AU only as I cannot see how else I can get this to work.
Thanks again.

[MVE]

I pay for the items using either PayPal or American Express Credit card.
Paypal withdraws from my Amex anyway. this is how I am going back into the Send Money screen and editing the payment to reflect the AU$ amount that it actually cost me.
I have found that putting the conversion rate in does not always automatically equal the correct amount as there is often a small fee in the conversion as well as the rate. It can literally change from minute to minute and supplier to supplier as they never seem to balance out correctly.
I sometimes make a profit on the transaction of conversion (and sometimes it shows a loss) weird.

[Brucanna]

@MVE - where to start, have spent some time using the data shown in your screenshots, including your entry anomalies and then manipulating that data by using different settings and transactions and I “can’t” recreate your situation - most puzzling however is the fact that one of your screenshots is displaying data it shouldn’t be but we will get to that

First the entry anomalies.
Taking the Payment screenshot shown in your first post.
a) There is no need to enter “qty” values, these are only required when entering Inventory Item data.
b) The “NAB Fee” should not be included in that payment transaction as the fee is not payable to the supplier.
The way you have it is this - The supplier is owed US$ 269.10 which becomes A$ 374.36. Your payment transaction shows you paying the supplier A$ 381.85, or an overpayment of 7.49. The bank fee is payable to a different supplier.

Edit : However, having just read your later posts it would appear that you are aligning the payment transaction to match the credit card statement amount, if this is correct then I understand your actions. Perhaps if I could suggest, that the fee (a purchase cost) be added to the Inventory Item so that the Inventory value reflects the landed cost - read the guide on Freight-In for more details.

c) The date of the Payment is exactly the same date as the Purchase Invoice. This generally is an incorrect usage of the Purchase Invoice as it’s designed for when the payment is made separately from the purchase. If you paying at the time of the purchase then generally a Spend Money entry is all that is required.

However, if the intention is for traceability of transactions with a supplier, then I understand the actions.
I know these aren’t resolving your issue but are just things I bumped into during my process of re-creation.

Now for your last P&L screenshot for the date 19.12.2016: that Inventory - Cost should not be there - regardless of it being the right or wrong figure.
.
Your report clearly displays “Cash Basis”, which means that both the Sales Invoice and the related Inventory Cost values don’t appear in the P&L until the Sales Invoice has been paid for. I can’t recreate this.

Cash Basis

Accrual Basis

What happens to your P&L 19.12 report if you toggle it to accrual basis ?

So where to from here.
It would appear that something (which I can’t replicate) in “your” data file is causing the issue.
If other users (including myself) were having the same issue, then the forum would be screaming with posts.

If I understand it correctly, the above example is not just an isolated case but typical of similar transactions, true.

Without accessing your actual data file there’s not much more I can do so your options are
a) Create a test company and enter a minimal number of setting changes and transactions (which I could guide you with) and check the results - If the issue doesn’t re-occur then your data-file has the issue.
b) Send a private message to @lubos referencing this thread and see if he wants to run an analysis of your data-file as there maybe an underlying programming bug that is only triggered by a particular sequence…
c) Convert existing and wait until I get the final bill from the Bank and just enter the values in AU only.

PS: what version of Manger are you using and have you updated recently. Does the issue still occur after an update.

[lubos]

@MVE, I’m interested to see what’s the issue. You could create test file with just enough transactions to demonstrate the issue and upload it here.

However, I’ve noticed you are entering purchase invoice and then recording payment on the same day. If you don’t owe money to USD supplier (because you pay when invoice is issued), then you don’t need to create purchase invoice at all. Just record payment from your cash account and allocate it as a purchase of inventory item. This might also void reason for using multi-currency.

[AaiRIz]

@MVE Friend, As per data available from you, I make one Demo of that. In that If I Create P&L report with “accrual Basis” all things are correct. But Nothing display in “Cash Basis” report. (Reason Given Bellow)
So @MVE If I put any wrong data then, please correct it and upload the correct data file by your side.

I think you have This type of Problem… You Must check with “”“CASH ACCOUNT”“” Option…as you see in bellow photo.

If do not this type then please Generate one report with “accrual Basis” also can get original data. and also take picture of “summary”