Hello is it possible to get exchange rates used for each line of Transaction ?
Manager has an option of recording exchange rates for each day but their is a problem wherein in a single day multiple changes in exchange rates happen. Is it possible to get exchange rates used for each line of Transaction against base currency.
If their is any option, could some one please brief me out on how to update with the settings.
The answer depends on exactly what you are doing. In some cases, such as when receiving a payment in one currency against a sales invoice in another, you can enter equivalent amounts and the program calculates the exact exchange rate. This can be on a line-item basis.
You need to furnish a more detailed use case.
We are experiencing a challenge in handling exchange rate in our transactions.
Manage has a fixed rate settings.
The exchange rate is cascading seriously high these days, far higher than the settings done, how do we handle it.
For instance, what was set for USD was N186 per USD, and
for EUR was N211.7,
Now USD has gone as high as N450 and EUR to N550.
Changing the settings of exchange rate will disrupt the all data earlier posted and reports.
Please help out.
I don’t understand the issue.
Is you company a listed one so that you need to calculate the NAV many times a day?
Changing the exchange rate only effects postings on or after the date associated with the exchange rate.
Previous posting will not use the new rate
Your response means that each time the exchange rate changes, we need to set a new rate on the date the changes occurred.
Our company normally buy foreign currency in other to pay foreign vendors.
I await your reply please.
In that case, you need to record the currency you buy at the rate applicable when you buy it with your base currency. It should be posted into a bank or cash account denominated in the foreign currency. The value of that account, as converted to your base currency, will fluctuate with future exchange rate changes.
Please one more clarification.
If we pay for an item on 5th May, 2020 for $1,000 at an exchange rate of N280/$ (ie $0.003571429), and on 7th July, paid for another item for $600 at an exchange rate of N370/$ (ie $0.002702703).
Given the fact that an exchange rate exist in the system at N200/$ ie ($0.005),
how will it be handled for the interactions takes place behind the scene.
There’s a whole lot of confusion for me, please guide.
Either you enter the two amounts (one in $, one in N) in the transaction record as indicated by Tut or you create two exchange rates dated 5th May and 7th July
Manager does not create exchange rates by itself.
If there is an exchange rate of N200/$ you must have entered it at one time
Does your bank accounts from which you make the payments is in your local currency or $?
In the first case, even more if your assets are valued in your local currency, you made a payment in local currency (converted by the bank) and you should not even take into consideration different currencies.
If all Assets and Liabilities are all in local currency it is completely useless, and even wrong under an accounting point of view, to register them in foreign currencies.
It all depends on how inventory is accounted and how items are invoices.
I still believe Manager should be having an interface like journal entry transaction has. Wherein there should be a multiple exchange rate option to record in a SINGlE DAY of any base currency against other foreign currencies.
A simple interface to understand this would be like each reciepts / payments transaction should be having a base currency option and an equivalent amount to be recorded under foreign currencies just like how Journal Entry tab works.
If this happens, it will be better for those companies who buy foreign currencies with immense fluctuations in a single day.
Joe01 and others, thanks for your contribution.
Our local currency is in Naira.
We have dollar bank account, as well as Naira account.
We normally buy dollar with Naira, pay into our dollar account, then pay from there.
Are we saying that journal should be used at the point of Dollar purchase.
The exchange rate of N200/1$ was set up during the start up at the setting page.
If we are not suppose to set it up, how will we had entered the opening balance for the Dollar account.
Please lets address this issue.
I assume you are talking about day to day variations, in that case you must make a new entry at a new date each day and not change the previous entry. I usually use the feed from our central bank or local bank to import every month in a batch.
In case you are talking about multiple rates within each day, then may be you should setup multiple currencies e.g. (EUR 1st counter, EUR 2nd counter, EUR retail … etc.)
I think this method is good.
You should create the dollars bank account and register an inter account transfer between the two with the amount in Naira and the amount in dollars. You basically buy dollars at an exchange rate fixed each time. This amount of dollar will never change (unless you buy or sell something from this account).
As said after that you will buy items in dollars directly from your dollar bank account.
A completely different thing is how to keep update the values of your assets and liabilities that you have in dollars inside your BS.
You shouldn’t input each day the exchange rate, even if you can and maybe it is necessary due to big exchange rate fluctuations between Naira and Dollars. But you should, at least, at each closing of your accounting period.
This exchange rate registration will determine, at each closing time, the updated value of your assets and liabilities, ie of your inventory in dollar, of your dollar bank account and of your liabilities for unpaid dollar invoices and so on.
By the way, this has very little to do with how Manager works. These are the basic principles of multi-currency accounting that I invite you to deepen and study.