Cross-Currency Payments
You can pay invoices in any currency, irrespective of the currency on the invoice. With cross-currency payments you can make payments in the most stable currency or comply with legal regulations that prescribe payment in a specific currency.
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During invoice creation, your setup determines the default payment currency or you can manually select the payment currency, irrespective of the invoice currency.
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During payment creation, the cross-currency rate converts the invoice amount to the payment amount.
For example, you can make a payment in Euros for invoices created in Pounds Sterling.
This table lists the currencies and cross-currency rate information.
Invoice Currency |
Payment Currency |
Cross-Currency Rate |
---|---|---|
GBP |
EUR |
1.25 |
This table shows the conversion of the invoice amount to the payment amount using the cross-currency rate.
Invoice Amount |
Invoice Amount * Cross-Currency Rate |
Payment Amount |
---|---|---|
100 GBP |
100 * 1.25 |
125 EUR |
Benefits
With cross-currency payments you can:
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Manage your cross-border transactions effectively.
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Comply with legal regulations and make payments in the prescribed currency mandated by the country authorities for the resident supplier.
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Save costs by making payments in the most stable currency and avoiding losses due to currency rate fluctuations.
Conversion Rates
In addition to cross-currency rates, other conversion rates can apply when invoices and payments have different currencies. Following is the list of conversion rates:
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Invoice conversion rate: Converts the invoice currency to the ledger currency
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Cross-currency conversion rate: Converts the invoice currency to the payment currency
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Payment conversion rate: Converts the payment currency to the ledger currency
This table provides an example of the different conversion rates along with the converted transactions for a ledger currency of US dollars and an invoice entered in Pounds Sterling and paid in Euros.
Starting Transaction Amount |
Type of Conversion Rate |
From Currency |
To Currency |
Conversion Rate |
Converted Transaction Amount |
---|---|---|---|---|---|
100 GBP |
Invoice |
GBP |
USD |
1.75 |
175 USD |
100 GBP |
Cross-currency |
GBP |
EUR |
1.25 |
125 EUR |
125 EUR |
Payment |
EUR |
USD |
1.45 |
181.25 USD |
Setup
You can set up a default payment currency for:
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A supplier site on the Invoicing tab of the Supplier Site page.
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An invoice business unit on the Manage Invoice Options page.
You can't update the payment currency on an invoice once you save the invoice.