Understanding Manual Payments in an Alternate Currency

An alternate currency payment is a payment that is in a currency different from the domestic or foreign currency of the voucher to which it applies.

With 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. This prevents you from having to void the original voucher and enter a new voucher in same currency as the payment.

For example, a Canadian company that enters voucher in the euro (EUR) can pay in Japanese yen (JPY). Similarly, a French company that enters a voucher in JPY can pay in Canadian dollars (CAD). In both examples, the Canadian and French companies must set up their systems to process alternate currency payments.

Most of the processing for alternate currency payments is based on the setup that you do before you actually enter the payments. You activate alternate currency processing in a processing option in the A/P Manual Payments program (P0413M).

To enter a manual payment in an alternate currency, you must apply the payment to existing vouchers using the A/P Manual Payments program. You specify the alternate currency code in which you want to pay when you enter the manual payment. The Payment with Voucher Match program converts the selected vouchers to the alternate currency amount to that you can apply the alternate currency payment. To convert the voucher amount, the program uses the exchange rate between the voucher currency and the alternate currency in the Currency Exchange Rates table (F0015) or, if applicable, a spot rate entered on the payment record.

The system does not print manual payments in alternate currencies. You must write alternate currency payments manually.

When you enter a manual payment in an alternate currency, the bank account currency has to be the same as the transaction currency of the voucher, if the voucher was assigned a monetary bank account. This is true even when the Activate Alternate Payment processing option in the P0413M program is set to allow alternate currency. You can pay only domestic vouchers from a domestic currency monetary account. In addition, if the currency code for the bank account is not blank (i.e., it is a monetary account), the currency code must be the same as the foreign currency code on the transaction.