Vendor Invoice Entry
The vendor code entered in Vendor Invoice Entry determines the vendor currency used for the transaction. The currency code of the transaction will be displayed after the 'Total amount' field and on the Vendor Info Bar.
Processing Rules
- The currency is determined once the vendor code is entered into the screen. From this point on, the currency code stored in the invoice header table is used for all processing. This is to protect from the case where the user changes the currency on a vendor as the transaction will retain the original information.
- It is important that the user select the vendor with the same currency as found on the invoice. If the invoice was written in Euros and the company will pay the invoice in Euros, enter all numerical values in Euros. Example of Vendor Invoice Entry with VAT enabled
Example of Vendor Invoice Entry with VAT enabled
Enter the following £1,500 invoice for Grahams Hi-Fi. It is subject to 20% VAT. Charge it to job 300, phase 01-0200, cost type M. No other use tax is charged to the invoice.
Example:
|
Currency |
Vendor Currency: GBP |
Reporting Currency: USD |
Reporting Currency: USD |
|---|---|---|---|
|
Amount |
1,800.00 GBP |
$2.291.60 |
$458.32 DR VAT Payable & $2,749.92 CR A/P Trade |
|
Exchange Rate |
1.00 USD = £ 0.654564 |
||
|
Posts to |
A/P and Bank Account Reconciliation |
G/L and Job Cost |
G/L Only |
Journal Entry
|
Transaction |
G/L Code |
In GBP (0.654564) |
In USD (1.00) |
|---|---|---|---|
|
DR |
1515 Direct Job |
1,500.00 |
2.291.00 |
|
DR |
0216 VAT Payable |
300.00 |
458.32 |
|
CR |
0209 A/P Trade - GBP |
1,800.00 |
2,749.92 |
Segregating Accounts by Currency
Once the vendor is entered and the currency derived, the invoice will use any 'override G/L account codes' set up on the currency code. Enforcing these G/L payable account codes will assist when the Controller has to manually translate these values back into their respective currencies for financial reporting purposes.
During data entry, when a transaction uses a non-reporting currency, the software replaces the standard installation G/L accounts with these currency defined G/L accounts as defaults.
Exception to the rule: If cost centers are present and 'G/L Account Overrides' are enabled, the system will always use the Override G/L account code setup instead of the currency-specific settings.
At the end of each accounting period, GAAP requires that receivables and payables held in non-reporting currencies be revalued using the month-end FX rate. The Controller will run the Aged Payables report and Aged Open Items Report by currency, revalue it into the reporting currency and make appropriate reversing journal entries.
Determining the Invoice Exchange Rate
In general, the system will determine the appropriate exchange rate based on the invoice's G/L date. The following explains how the exchange rate is determined and when it is locked into the transaction.- Unposted Transactions Rule
- The exchange rate is determined dynamically for unposted transactions. Here, the exchange rate is not stored and any changes to the FX rate for the entered G/L date will be used in translating unposted transactions.
- Posted Transactions
- The exchange rate is determined and stored permanently in the transaction history table when the invoice is updated. This stored rate will be used for any subsequent reporting or processing of this invoice.
- Special Rules for Multi-Company Exchange Rates
- For a multi-company invoice, the system will look up the exchange rate in the distribution company. For this reason, the currency of the transaction must be set up in that other company. The system will not allow the user to continue their entry when the currency code has not been set up in the other company.
