19 Multi-Currency for Manual Receipts
This chapter contains the topic:
19.1 Overview
From Accounts Receivable (G03), choose Manual Receipts Processing
From Manual Receipts Processing (G0312), choose a receipts entry method
When applying cash to foreign invoices, you may use either the foreign or the domestic currency (company base currency) of the invoice to make the payment. In addition, there may be instances where you receive payment for an invoice in an alternate currency, which is a currency other than the domestic or foreign currency on an invoice. This section details applying receipts in either the foreign or domestic currency of an invoice. See Chapter 21, "Processing Alternate Currency Receipts" for information on applying receipts in an alternate currency.
If you are applying a receipt that is in a foreign currency, the transaction Currency Code field (CRCD) will determine the currency of the actual amounts applied. If you are applying a receipt that is in the invoice domestic currency, the mode of entry field will determine the actual amounts applied. You may also apply a receipt in the current domestic value for an invoice, where the domestic value has changed due to exchange rate differences between the time the invoice was entered and the time of receipt entry.
This task consist of:
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Applying receipts in a foreign currency
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Applying receipts in the domestic currency
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Applying receipts in the current domestic value
19.1.1 Before You Begin
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Confirm current exchange rates are set up in the Exchange Rates table (F0015)
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Verify the following AAIs are set up correctly:
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RG (realized gain)
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RL (realized loss)
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To enter a receipt in a foreign currency
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Follow the steps to enter a manual receipt.
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Complete the following fields:
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Currency Code - enter the foreign currency code for the invoice.
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Exchange Rate (optional)
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| Field | Explanation |
|---|---|
| Mode | A code that specifies whether amounts are in the domestic currency of the company the vouchers are associated with or in the foreign currency of the transaction. Codes are:
D – Domestic F – Foreign |
| Currency Code | Indicates the transaction currency for the receipt. If you leave this field blank, the default value from the customer master record will be used. If the customer master has no currency assigned, the value will default from the base currency of the company on the receipt header and the mode will default as 'D' for Domestic. To enter a receipt in the invoice foreign currency it is MANDATORY to enter the transaction currency. |
| Exchange Rate | The conversion rate that the system uses to convert foreign currencies to domestic currencies. If the Multi-Currency Conversion option on the Set Multi-Currency Option form is set to Y, this rate is a multiplier. If it is set to Z, this rate is a divisor. |
Gains and losses will be calculated if you are receiving cash in a foreign currency (Mode=F). They are calculated using the exchange rate from the original Invoice and comparing it to the exchange rate of the cash receipt.
The system creates an RG document to record either the gain or loss. The system can assign two different Type Input codes to the RG document:
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F - foreign gain/loss
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Z - foreign gain/loss on a spread
Note:
There is never an RL Document.The codes are displayed when inquiring in domestic mode only and are not calculated for the following types of entries.
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Adjustments (Type Input of A)
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G/L entries (Type Input of G)
Enter 'D' in the mode field to display the domestic entries.
Figure 19-2 Receipts Entry screen Displaying Domestic Entries
Description of "Figure 19-2 Receipts Entry screen Displaying Domestic Entries"
To enter a receipt in domestic currency
To apply a receipt that is in the company's domestic currency to a foreign invoice, you must use the Domestic mode of entry for the receipt and populate the transaction currency code field with the foreign currency of the invoice.
On Receipts Entry
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Follow the steps to enter a manual receipt.
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Complete the following fields:
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Mode - enter 'D' for domestic
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Currency Code - enter the foreign transaction currency for the invoice
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Use Account Inquiry (F15) or Ledger Inquiry (F16) to pull in the open invoice for payment or manually enter the invoice information. Amount Applied will be the domestic amount.
Note:
The foreign transaction currency for the invoice must be entered to select the invoice for payment if using Account Inquiry (F15) to display open invoices or Ledger Inquiry (F16). When using Ledger Inquiry, the invoice will be displayed in the foreign currency; when you select the record and exit back to Receipts Entry the Amount Applied field will default with the domestic amount.19.1.1.1 Example
You have entered a foreign standard A/R invoice with a transaction currency of Canadian dollars (CAD) and a base (company) currency of United States dollars (USD). The customer has sent the domestic (USD) dollars to pay the invoice. To apply the receipt in domestic currency, you would need to complete the following fields:
| Field | Value |
|---|---|
| Mode | D |
| Company | USD company number |
| Transaction Currency Code | CAD |
Note:
When you make a payment in the domestic currency mode, there will be no gain or loss recorded. It does not matter if you enter a GL date that might have a different exchange rate or if you enter a spot rate, the system will always use the original exchange rate. If you need to record the cash with a different exchange rate, the item must be entered in foreign mode.To enter a receipt in current domestic value
The domestic value of a foreign invoice may change as exchange rates fluctuate. When paying a foreign invoice in the domestic currency, the system will normally use the same exchange rate on the invoice, regardless of the current effective exchange rate in the exchange rates table or a spot rate entered. The result is that the domestic value of the receipt matches the domestic value of the invoice and no realized gain or loss occurs.
You have the option of applying a receipt in the domestic currency of the invoice but using the current domestic value based on a current exchange rate rather than the existing domestic value of the invoice. You must activate this functionality by using the Current Domestic Value processing option for Receipts Entry (P03103).
On Receipts Entry
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Follow the steps to enter a manual receipt.
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Complete the following fields:
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Mode - enter 'D' for domestic
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Currency Code - enter the foreign transaction currency for the invoice
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Use Account Inquiry or Ledger Inquiry to pull in the open invoice for payment. The exchange rate will automatically default
Figure 19-3 Receipts Entry screen for Entering a Receipt in Domestic Currency
Description of "Figure 19-3 Receipts Entry screen for Entering a Receipt in Domestic Currency"
The exchange rate will automatically default from the Exchange Rates table with the effective rate. The Amount Applied will be calculated as the current domestic value using the effective exchange rate. You will see that the Gross Amount displayed for the invoice will be the original domestic amount.
Note:
The foreign transaction for the invoice must be entered to select the invoice for payment if using Account Inquiry (F15) to display open invoices or Ledger Inquiry (F16). When using Ledger Inquiry, the invoice will be displayed in the foreign currency; when you select the record and exit back to Receipts Entry the Amount Applied field will default with the current domestic value and the exchange rate will be populated with the effective exchange rate from the Exchange Rates table.Gains and losses will be calculated if you are receiving cash in current domestic value. They are calculated using the exchange rate from the original invoice and comparing it to the exchange rate of the cash receipt.
The system only creates an RG document to record either the gain or loss. This RG document can have two different TI codes assigned to it:
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F - foreign gain/loss
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Z - foreign gain/loss on a spread