Purchase Order Amount

Hi, im very confused about whats happening in the Accounts Payable.

Base currency: CAD
Supplier Currency: USD
No currency exchange entered

I created a PO: $1260 USD
I created an Invoice: $1260 USD

When looking at accounts payable the amount is C$1373.45

can someone please explain whats happening?

  1. Your purchase order had no effect whatsoever. Purchase orders are just for convenience, especially when you later copy them to other transactions that do affect the financials.

  2. All balance sheet accounts are restated in your base currency. Otherwise, your books would not balance. There are placeholder exchange rates in the program when you download it. Otherwise, it could not run. These are what were used. You should enter actual exchange rates for more accurate records.

I am presuming that your accounts payable is in your base currency and that the Purchase Invoice has been converted to CAD using the exchange rate in Settings/Exchange rates

You need to post screen shots of the edit screens of the purchase invoice and of the Settings/exchange rates screens

I see, that makes sense.

Just to confirm, when times comes to actually make the payment for the invoice in USD then I could have to enter the most recent exchange rate prior to making the payment transaction?

How will the rate fluctuation be captured? gain/loss?

Joe91: i dont have any exchange rate entered in settings.

You can enter an exchange rate. But assuming you are actually going to pay from an account denominated in USD, after you select Accounts payable and your USD supplier, another field will appear for that line item where you can optionally enter the actual USD amount (in addition to CAD amounts you have already entered). Manager will make the conversion for you.

Gains/losses appear in an automatically created account called Foreign exchange gains (losses).