That is because you are not paying a specific expense claim, even though that may be the purpose of the payment. You are paying off a liability in the Expense claims account. That account is not divided into subsidiary ledgers like Accounts payable is for suppliers.
True, because that is the currency in which you are paying. Any foreign-denominated expense claims have also been converted to your base currency in the Expense claims account. And payments will be posted to the Expense claims account in your base currency, regardless of the currency in which they are paid.
You need to figure the equivalencies first. And you have to accept that operation in multiple currencies will inevitably result in foreign exchange gains/losses as exchange rates change.
I don’t think so. Purchase invoices are recorded in the currency of the supplier. They are paid in the currency of the bank or cash account. So there is only one exchange rate applicable at the moment of reimbursement, which is the single multi-currency transaction. In Manager, you can force equivalence between the payable and the payment, and the program calculates the effective exchange rate.
The sort of expense claims you describe have the currency of the merchant from whom the expense claim payer bought something (call that A), the base currency of the business into which the claim is converted (B) in the Expense claims account, and the currency of the cash or bank account from which the claim is reimbursed ©. So you have three exchange rates involved: A-B, A-C, and B-C, all moving independently. While you might force equivalence at any given point in the workflow, there are three separate transaction points spread out in time. You cannot reasonably expect all three exchange rates to remain fixed.
There are some workable options to simplify things, several of which I describe below. All still require considerable work, but they reduce the number of exchange rates and conversions involved. They are not intended to all be used simultaneously:
- Require that expense claim payers submit claims in the base currency. This may mean they need to wait until credit card transactions are cleared and converted. In fact, it might require use of personal credit cards denominated in the base currency of the company.
- Require expense claims to be submitted in the currency in which they will be reimbursed. Many of the problems mentioned above will still be encountered.
- Require cash expenditures in foreign currencies to be documented as conversions from either the base currency or the reimbursement currency. It is simpler if this can happen only once per trip.
- Prohibit cash transactions on expense claims, requiring all expenses to be converted by the card processor to either the base or reimbursement currency.
Expense claims can be complex to start with, because transactions are occurring outside the accounting system of the business. Foreign currency purchases make them at least twice as complex. Foreign currency reimbursements probably make them four times as complex. Speaking from experience, a travel expense claim entirely in my base currency takes a few minutes to process. Adding some cash conversion at the airport and a few foreign credit card charges can easily turn that into an hour, after waiting a week for charges to clear. All the extra time happens outside Manager.