Payment Processing in a Multicurrency Environment

Multicurrency also affects payment processing at many levels.

Payment Selection

From a multicurrency perspective, PeopleSoft Payables determines the amount of a given currency required to pay a scheduled payment. The payment currency does not have to be the same as the voucher transaction currency. In fact, the payment currency can be in any currency that you have set up for the bank. You can either accept the default or select another valid currency code.

Payment Creation

During payment creation, the system converts the voucher transaction currency to the payment transaction currency for the payment. It converts the payment transaction currency to the voucher base currency and the bank base general ledger currency for posting. The amounts form the basis of realized gain and loss accounting entries created in payment posting.

PeopleSoft Payables supports checks, automated clearing house (ACH) payments, direct debits, wire transfers, electronic funds transfers (EFT), drafts, GIRO, letters of credit, and bank transfers. The Pay Cycle Application Engine process (AP_APY2015) consists of payment selection and payment creation. Output processes print checks and create files.

The payment creation process populates the payment amount and bank base amount of the payment. The payment table also holds the corresponding currency codes and rates. The check print process accesses the currency code table to access symbols and descriptive information to print on the check and remittance advice.

The Trial Payment Register, the Payment Register, and the Payment Forecast reports all reflect multicurrency payments.

Note:

During payment creation, the system calculates the payment transaction currency from the voucher transaction currency.

This graphic shows the currency conversion process for vouchers and payments.

Payment Posting

The Payment Posting Application Engine process (AP_PSTPYMNT) creates accounting entries that relieve liabilities and record payments, as well as discounts taken or lost, VAT, withholding and realized gains and losses. The Payment Posting process also creates accounting entries resulting from canceled payments (void and stop checks). The system calculates the exchange rate gain or loss by subtracting the BASE_CURRENCY at payment time from the BASE_CURRENCY at voucher entry time. However, if the voucher's transaction currency is different from the payment's transaction currency, the gain or loss is an overall gain or loss.

When the Voucher Transaction currency and the Payment Transaction currency are not equal, and you use the General Ledger Balance By All Currency, the Payment Posting process will automatically generate additional entries to balance by Foreign currency. The amounts will be posted to the RSAF (Rounding Suspense for Foreign) account and the system will use the ChartField values that were established on the Accounting Entry Template.

Exchange rate gain or loss process flow.

If a situation arises where the voucher is in currency A, the payment is in currency B, and the voucher's base is in currency C, you have a potential realized gain or loss. In this situation, the payment accounting entry foreign currency is the currency of the payment.

When rounding errors occur during the generation of accounting entries, the amounts are posted to the rounding suspense account. Rounding suspense account entries can be reclassified in PeopleSoft General Ledger for any ledgers.