Understanding Automatic Payments in a Foreign or an Alternate Currency
You can write automatic payments in the foreign (transaction) currency of a voucher or in an alternate currency, which is a currency different from the domestic or foreign currency of a voucher.
With the flexibility of alternate currency payment processing, you can enter a voucher in one currency and issue payment in a currency that is different from the transaction currency of the voucher and the domestic currency of the company. For vouchers that are domestic currency only and for vouchers that are foreign currency, this prevents you from having to void the original voucher and enter a new voucher in the same (alternate) currency as the payment.
Most of the processing considerations for foreign and alternate currency payments are based on the AAI and processing option setup that you do before you actually write the payments. Processing options in these programs control the ability to write automatic payments in a foreign or alternate currency:
Create Payment Control Groups (R04570)
Work with Payment Groups (P04571)
You designate the foreign or alternate currency in which you want to create payments in the processing options for the Create Payment Control Groups program. For alternate currency payments, the system converts the selected vouchers to the alternate currency amount using the exchange rate for the domestic to alternate currency or the foreign to alternate currency in the F0015 table.
If a voucher is assigned a monetary bank account, the bank account currency does not have to be the same as the transaction currency of the voucher when you process automatic payments in an alternate currency.
When you write payments in a foreign currency using the Work with Payment Groups program, the system calculates each payment amount by adding the total amount of the vouchers in the transaction currency.
When you write payments in an alternate currency, the system calculates the payment amount as follows:
It adds the total amount of the vouchers in the transaction currency. The transaction currency can be either domestic or foreign.
It uses the exchange rate between the transaction currency and the payment currency to calculate the alternate currency amount. The system retrieves the exchange rate from the F0015 table.
For example, a French company receives an invoice for 2,000.00 Canadian dollars (CAD) and pays in U.S. dollars (USD), an alternate currency. To calculate the payment amount, the voucher (supplier's invoice) is divided by the exchange rate (1.514692) as follows:
2,000.00 ÷ 1.514692 = 1,320.40 USD
Alternate currency payment amounts are stored in the Accounts Payable - Matching Document table (F0413). The currency in the F0413 table is different from the currency in the Accounts Payable Matching Document Detail table (F0414) because an alternate currency payment is involved. The historical exchange rate stored in the F0414 table contains the exchange rate that is used to calculate the alternate currency amount from the foreign currency.
If an error occurs when you write payments, a message appears after you enter the payment date. The error message that is specific to foreign and alternate currency payments is Currency exchange rate not found.