I’m using 2 currencies (ZWL and USD). Base currency is USD.
After entering a Purchase Invoice in ZWL , I select New Payment (which should also be in ZWL), but it is putting USD after the ZWL amount? The currency box is blank and in ZWL. This is where the USD currency equivalent should be.
For example - if the invoice amount is ZWL10 000 and the exchange rate is 100:1, then the USD currency amount should be USD$10. But it enters 10 000USD and ‘blank’ ZWL
Please provide some screenshots, including of your edit screen, in order to demonstrate the issue.
Because you base currency is USD it will show all the amounts in USD.
To get further assistance to specific scenarios please upload screenshots as @ShaneAU has suggested.
@ProDev, without screen shots, it is impossible to know with certainty what you are referring to. But, if I interpret you correctly, you misunderstand several aspects of Manager:
- If your base currency is USD and you enter a purchase invoice in ZWL, that is because the supplier is denominated in ZWL. All that supplier’s purchase invoices will be in ZWL.
- The payment currency is determined by the bank account from which payment is made, not by the currency of the supplier. When New Payment is first clicked, no bank account is selected, so the entry screen shows amounts in the base currency. But when I bank account is selected, the
Unit PriceandAccountfields change to the currency of the bank account. So, if the bank account is in ZWL, the payment will be in ZWL. It cannot be otherwise, because every bank account everywhere in the world can only be denominated in a single currency. - The purpose of the
Currency Amountfield that appears when the bank account is in a different currency from your base currency is to force equivalence so the Accounts payable account balance is stable. You can enter a foreign currency amount equivalent on the date of payment to the amount owed in base currency. Afterwards, the invoice will always show as fully paid, never over or underpaid. Differences in exchange rates will automatically be posted to the Foreign exchange gains (losses) accounts.
- Exchange rates you enter in the Settings tab have nothing to do with the
Currency Amountfield. In fact, the purpose of that field is to explicitly override whatever may be in Exchange Rates under Settings.
I believe any confusion stems from your use of USD as your base currency. You are not in the US, so it is very unlikely your tax and reporting requirements would lead you to use of the USD as your base currency. And doing so will generate a great deal of complication, especially if your local banking is done in ZWL.
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I think @Tut’s response should clarify everything for @ProDev, but I would like to respond to the following observation:
The history of Zimbabwe’s financial system is complex and defies logic at every turn. It is almost impossible to explain to anyone who hasn’t lived through it all. It’s hard enough for us to make sense of ourselves. But a little context might help to show where @ProDev is coming from.
There was a time not so long ago when our local currency was abandoned in favour of the USD, and that would have been the base currency. Then a new ZWL currency was introduced, first just as coins in low denominations to fill the need for change less than $1 (we never had USD coins here), and then later as a full currency. Our USD bank balances were “converted” to ZWL overnight, but there was also an option to open “real” USD accounts too (called “nostro” accounts here – I don’t know where that name comes from). So at that time ZWL should have been our base currency. I changed my base currency from USD to ZWL, but others, such as my accountant, never did, and so all her invoices carry the note that “amounts are in ZWL, not USD as indicated”. She seems to handle her USD transactions outside her accounting package.
Subsequently we have been permitted to trade in ZWL and USD (and many businesses have bank accounts in both currencies), but all transactions must be reported in the currency of the transaction. This makes our reporting in Manager challenging if we trade in both currencies, as Manager only allows one base currency. I have posted many times elsewhere in the forum about some of the challenges we have. If a business trades only in USD, then I think it would greatly simplify things to set the base currency to USD, as all the reporting from Manager would be in the correct currency for our authorities. If a business trades in USD and ZWL, I have considered that it might be helpful to treat it as two separate businesses in Manager, one in each currency. This could make the reporting much simpler. However, there are many possible factors that could make this much more complicated or impossible, such as having inventory that needs to be available for sale in either currency (as is my case). There are probably many other prohibiting factors that I haven’t considered yet.
My workflow involves using ZWL as the base currency, but it means that when I submit VAT returns and other reports I need to use a spreadsheet application to convert all the ZWL amounts for USD transactions back into USD amounts. As most of my transactions are in USD it might actually make more sense to set USD as my base currency and do the conversions of the USD amounts for ZWL transactions. Perhaps this is what @ProDev is doing, or perhaps he has no ZWL transactions at all.
If you find yourself asking why we are required to report all transactions in the currency of the transaction and not in our base currency, I’ll give a little more context. Our official ZWL to USD exchange rate is set by the Reserve Bank based on a weekly auction of USD. However, getting access to this currency auction is not easy, with stringent eligibility requirements and then in some cases long delays in receiving the USD from a successful bid. The parallel rate is widely considered to be roughly double that of the official rate, so if USD 1 sells for ZWL 150 at auction, it might go for ZWL 300 on the black market. Consider also our accelerating inflation and you can see why it is in the interests of our authorities to track a USD 10 transaction as such, and not as a ZWL 1,500 transaction.
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@GrahamvdR I read your response with great interest, although I am living in The Netherlands.
In my opinion, sharing knowledge is the most valuable option of using the forum.
Perhaps solutions can also be found based on the shared knowledge.
I understand that there is no appropriate solution at this time, yet it is good to know what is going on, with the background info you have shared.
Thanks for that!
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I think that this is a problem that needs to be solved.
This is an old issue that got @lubos attention in 2015 but somehow got filtered down in favor of more popular developments.
This is the old post for reference:
Now to reiterate the problem, the problem isn’t with Manager having to auto convert foreign currency receipts and payments, because that would certainly be undesirable since for a specific transaction the actual exchange rate is more likely than not be different from the standard exchange rates kept in the settings.
The proper solution would be to place the 10000 ZWL in the correct field and let the user supply the local currency figure.
To me at least, the solution would be to standardize the treatment of currencies such that the local currency becomes just a special case of foreign currency with a fixed exchange rate of 1.
This will ensure that all forms use the “Currency Amount” field by default in all UI forms which will not only ensure consistency in treatment of amounts across different documents and currencies.
It would also be nice to have Manager reverse calculate the currency amount in case the user didn’t supply it when using Batch Operations or API calls.
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Hi All, I’ve been away since my initial post at the top of this thread, hence no response till now. Thanks to those above who have tried to explain/solve the issue, plus the detailed narrative of the intricacies of doing business in Zimbabwe.
I’ve attached screenshots above, originally requested as I still believe this is an issue that needs resolving.
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So I have base currency as USD as that is what we trade with. Purchase invoice received is for
ZWL 49 315. But payment is being effected from a USD account.
From your screenshots it looks like your supplier is denominated in ZWL. However, the account you are paying from is a USD account. So, Manager needs to know how much is leaving your account (USD), and it needs to know how much to apply against your accounts payable in the currency of the supplier (ZWL). There are a few things to consider here:
- Which currency should be shown first? To me it makes sense to show the USD first here, as that is the currency of the account. If I am handing over US$100 to a supplier, the first thing I want to record is that I paid them US$100. Conversions to ZWL are a secondary concern.
-
How does Manager handle the conversion to the currency of the supplier? Although Manager has the facility for inputting exchange rates, it does not automatically use these for payments and receipts. This is because in most cases the actual transactional rates will not match the official rates used for tax reporting, and if Manager tries to apply the rates automatically it will create all sorts of problems with over- or under-payment. You know how much money you handed over to your supplier, and you know how much was credited to your account, and so you should enter these amounts manually yourself. Manager will infer an exchange rate from these amounts, and if it is different from the rate entered in your settings then the difference will be reported in the built-in
Foreign exchange gains (losses)account. -
What amounts should be pre-filled in the
AmountandCurrency amountfields? It does seem counter-intuitive to me that the outstanding ZWL amount is filled into the USD field. I would propose that the outstanding amount from the purchase invoice populate theCurrency amountfield. I think this is what @lubos is referring to above in the post quoted by @Ealfardan, so hopefully it will be addressed.
So, to me the only thing that needs to be changed is in which field the outstanding amount is pre-filled. But even if this is done you will still need to enter the USD amount yourself and double check the ZWL amount (in case there are previous credits on your account, for example, which would change the amount owing).