DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Recording a currency conversion rate


#1

I am working in multi-currency. I have managed to set everything up OK and my first transaction in US Dollars worked well (except a 0.01p difference). Anyway, I use Paypal to make the payment and there is a currency conversion rate recorded.

My question is this, how should I record this in transactions? For now I have just recorded it as a bank charge in a separate transaction. Is this the right way to record it?


#2

Recording custom exchange rate on transactional-level is not yet supported. So when you record payment from foreign currency account, Manager will use either exchange rate configured under Settings -> Exchange Rates or in-built one. This is usually not an issue unless you make transfer between two bank/cash accounts in different currencies (this case is not handled very well in Manager right now but it is high priority to get it resolved asap)

I wonder, how did you end up with 0.01p discrepancy. Where have you seen it?


#3

Hi Lubos,

The 0.01 discrepancy is shown on the summary tab in the Income box as a loss in Currency Gains/Loss.

Clicking on it shows me an Exchange Gains/Loss transaction in my Accounts payable.

Don’t understand how it comes about to be honest, I just fiddled one of the other amounts by a penny to tally up the balances. :smile:

Regards, Robert.


#4

Following on from this thread, I am having some real difficulty in knowing how to deal with a transaction I carried out today, I just have no idea how to approach this issue at all. Following represents step by step transactions and the result at the end.

  1. Create an purchase order for $1494.50.
  2. Convert to purchase invoice for inventory.
  3. Click spend money, check and pay…
  4. Result found to be a massive overpayment! It converted the USD to pounds in bank account.
  5. Delete bank entry, click spend money and enter payment made in GBP. Total £901.36. This is the figure calculated by Paypal when completing the transaction and is what has left my bank.
  6. Find I’ve now made an overpayment to the supplier for $33.22. This is due to Paypal exhange rate differing from real exchange rate.
  7. Attempted changing exchange rate to that of Paypal’s in settings but found, not only was there still a discrepancy of 0.01p but it also changed the amounts on a previous order with same supplier!
  8. Having reset the exchange rate back to normal I am left with trying to find a way to account for the $33.22 difference.

Please bear in mind, I’m an engineer, not an accountant. I’m sure there’s an easy way to deal with this but I don’t wish to muck my books up any more!

Hope someone can help. Thank you.


#5

The main issue is that Manager doesn’t allow to set exchange rate on transaction level. There is a reason behind that but more on this later.

First I’m curious about these 0.01p discrepancies when recording multi-currency transactions. What was the exchange rate Paypal has used? It could be that there is a rounding bug in Manager.


#6

This is the rate I was charged at, although I’m sure on the day on the transaction it was 2 digits longer!

1 British Pound = 1.6580 US Dollars

How do I record the difference so I don’t appear to owe the supplier anything? The bank balance tallies up but I’m left in credit with the supllier which, of course, I’m not!

Thanks, Lubos.


#7

Don’t worry about my discrepancy issue. Multi-currency is causing far too many issues so I’ve decided to convert all monies to GBP myself and enter it through the accounts this way. It was finally decided when I got my invoice from Fedex through today and I was faced with the issue of re-creating an invoice to remove the previous invoice for non-VAT goods and re-issue a new one with VAT applied to those goods. Bad enough trying to find a way to do that with two currencies in one invoice, but as the invoice was for inventory on hand it became far too complex!

Thanks anyway.


#8

Well, I don’t like giving up like that. The issue with Fedex invoice is not as complicated as you think.

It basically comes to this: Manager is missing ability to override exchange rate on transaction level. This is obviously important if you pay purchase invoice denominated in USD from GPB bank account. Right now you would have to adjust the difference by journal entry which I really don’t like as a solution.

So all I can say, I’ll hurry up with adding this ability. Then you wouldn’t face these multi-currency issues. I’m big believer in recording transactions as they happen rather than resorting to workarounds.


#9

Thanks, I admire your determination. I must admit, I haven’t used journal entries yet, I haven’t actually managed to get my head around them. I’ve managed to do without them so far. :smile:


#10

We too are now also suffering from the ±0.01 that can not be journaled out.
We created an income account “FOREX Balance” to use for recording Currency gains (losses) until the issue of posting to “Currency gains (losses)” is resolved. We are using this account as you suggested in the topic, “Handling overpayments when invoice and bank account are of different currencies”. Generally this has been working well.
However, for one of the purchase invoices we paid, we are unable to get it to “Paid in full” status. We have adjusted the journal entry up and down multiple times and the overpayment/underpayment increases and decreases in line with our adjustments but the invoice balance goes from -0.01 to +0.01 but never reaches zero.


#11

Regarding 0.01 discrepancy, there is one confirmed rounding bug from yesterday. It will be fixed today so let’s see if it’s the same bug that is affecting you.


#12

Hi - Once again, a fantastic response time. You are setting a service level we should all aspire to.
We have upgraded to v14.7.42 and tested the issue. We are still unable to achieve “Paid in full” status for the particular invoice.


#13

I upgraded to 14.7.42 too but my 0.01p discrepancy still exists so I’m guessing this update was to fix some other issues. This is why I like change logs for updates so I can see what has been changed. Unfortunately, Lubos releases so many new versions even he can’t keep up with a change log! :wink:


#14

Please upgrade to 14.7.43 where this bug has been addressed.


#15

Upgraded to 14.7.46,my 0.01p discrepancy has moved to Currency gains/losses. Also, Currency gains/losses still doesn’t appear in the Income dropdown menu. Should I create a separate menu item under Income to account for these?


#16

When multi-currency accounting is enabled, 0.01p is due to rounding when converting amounts between currencies.

So if rounding discrepancy is detected, it is now automatically moved to Currency gains/losses account which is correct.

I’m still working on a solution how to deal with the second issue.


#17

Thanks, Lubos. I’ll look forward to the solution in the future then.


#18

I also use multi-currency for imports, and as I’m not a huge player, I convert all my amounts to AU$ before entering them, and note on the original invoices the conversion rate at the time.
Just to add…
If you pay through Palpay, have a look at some of the commercial exchange companies, as the one I deal with has no charges when exchanging more than AU$10,000 per transaction at better than bank rates, and my money was in the US bank account the next day… Very impressive


#19

Do you have some idea of timescale for setting exchange rate per transaction, by any chance? It could be just a single entry item which applies to all transactions within a single purchase invoice. Would that make it easier?

Thanks, Lubos.


#20

I’ll do it next week.