Credit Card Purchases

Unlike instant manual checks, credit card purchases do not require that the account currency be the same as the vendor currency because it is common to purchase goods in different currencies.

Enter amounts in the vendor currency. During the update, the system will translate the vendor currency into the account's currency for Cash Management purposes. All transactions to the G/L will be translated into the reporting currency.

Credit Card Purchase Example

Assume a 100 British Pound invoice was paid for using a Canadian credit card. In this transaction, no VAT or GST was recorded. The invoice was charged to a job. The reporting currency is US Dollars.

The system will calculate the exchange rate from Vendor currency to the Account currency as it relates to the Reporting currency. Using the invoice's G/L dates, the following FX rates are in effect:
  • 1.00 USD = 0.654564 GBP
  • 1.00 USD = 1.320910 CAD
Use the following formula to calculate the effective interest rate between two non-reporting currencies:
  • From Currency FX Rate divided by To Currency FX Rate

    GBP FX / CAD FX = 0.654564 / 1.320910 = 0.495540

    100 GBP / 0. 495540 = $201.80 CAD

Thus, £100 .00 GBP is $152.77 USD which is $210.80 CAD.

Currency

Vendor Currency: GBP

Account Currency: CAD

Reporting Currency: USD

Amount

100.00 GBP

$201.80 CAD

$152.77 USD

Exchange Rate

1.00 USD = £0.654564

1.00 USD = 1.320910 CAD

N/A

Posts to

Accounts Payable

Credit Card Reconciliation

G/L and Job Cost

Journal Entry

The following is the journal entry that was booked when the Canadian invoice was updated.

Transaction

G/L Code

In GBP (0.654564)

In USD (1.00)

DR

1515 Direct Job

100.00

152.77

CR

0209 A/P Trade - GBP

100.00

152.77

This is the journal entry to record payment of the Canadian invoice with a GBP credit card.

Transaction

G/L Code

In CAD (0.1.1320910)

In USD (1.00)

DR

0209 A/P Trade - GBP

201.80

152.77

CR

0243 Bank of CAN - CAD

201.80

152.77