Though it is a good alternative way (I did not use the word “workaround”) of doing the entry. But don’t you think its rather easier to convert 1 or 2 local expenses to USD rather than converting 25+ items value to AED? The example you gave is of a Purchase Invoice with just 1 item.
Good point!
More then happy to have that debate via private message.
Generally the topic has remained on subject, the processes and options available within Manager to handle particular importing situations with their pros & cons.
I have read some of the comments and I agree with @Tut’s original method. This is because it very simple and a user doesn’t need to know so much accounting to use it.
No one said financial reporting is easy. If there are separate source documents for the purchases and delivery services accumulating to the total purchase cost of inventories, I would prefer entering each separately in invoices for (payables) and in spend money for services already paid (eg. Bank charges) and direct all those to the cost of the inventory. This keeps my accounts very neat and no need to create extra account in COA as suggested by @Brucanna.
I repeat no one said financial accounting is going to be easy. Often short cuts in book keeping end up being long cuts when you have to explain things to auditors or new people in the team.
Keep things simple as the software encourages.
And if these sources documents are in a multiple of currencies how do you convert them so that they become included (converted) into the total purchase cost of inventories.
Purchase Invoice 1 : Supplier in Euros with entry of 25 Inventory Items
Purchase Invoice 2 : Shipping in USD with entry of 1 item
Purchase Invoice 3 : Freight Forwarder in Base Currency covering customs duties, clearance fees and local courier, with entry of 3 items.
With the clearing account, you post both Purchase Invoice 2 & 3 to the clearing account, get a single total in the base currency, convert it to Euros and add it the suppliers purchase invoice as Freight-in where Manager will automatically re-distribute it over the 25 items and with an equalising contra entry to the clearing account.
Without the clearing account you would have to take Purchase Invoice 2, and convert it from a being a single entry item into 25 entry items but only after first manually entering those 25 items into spreadsheet where a mathematical formula is applied so that the original single entry value can be pro rata re-distributed over the 25 items
Then you need to repeat this entire process again for Purchase Invoice 3 plus again if there is others.
Any Importer will tell you that processing 3 purchase invoices as originals in their respective currencies plus doing one conversion and one purchase invoice edit can’t get it any simpler.
Compared to firstly duplicating the 25 items into a spreadsheet, applying formulas and then entering that duplication back for each imported related purchase invoice.
Or “Keep things simple as the software encourages” by only doing 31 accounting entries compared to doing 25 spreadsheet entries plus 75 accounting entries. Less entries ='s less opportunities for errors.
@Brucanna I would still avoid your method. Because I want my purchase invoices to show details and totals exactly as the purchase invoices received from vendors.
You are misunderstanding, that is exactly what (my) method does - it keeps the “purchase invoices as originals in their respective currencies”
The alternative which you were supporting requires you to convert the original, say the shipping purchase invoice with a single entry into a multi entry to suit the suppliers purchase invoice.
Quotes from the alternative
“There is another way to accomplish the same goal with the manual approach”
----- why do a manual approach when Manager does it automatically - how is that simpler.
“Then enter a purchase invoice for the shipping supplier with a line item for each inventory item”
----- entering for each inventory item instead of the actual shipping item is not keeping it original
“But there is no doubt your method is a slick approach that could simplify things when freight-in (assuming that includes brokerage, handling, customs clearing, and a wide range of other charges) is complex”
@Brucanna Maybe i have to look into it all again
Guys your long text could be easier to read in screenshots or picture. Is the issue solved yet? Is the freight-in contra account valid?
Yes