Selling to Foreign Currency Customers

Accolent ERP supports multi-currency through an API that delivers global FX Rates. Using the multi-currency module, an invoice can be created in foreign currency for a Customer. When the Invoice is created, Accounts Receivable/Sales will be debited/credited for the functional currency equivalent at that time. Subsequently when the Customer’s payment is received, Accounts Receivable will be credited for the functional currency payment received. Any difference between the Accounts Receivable amount and the Payment amount will create a realized Gain/Loss on FX.

Create Order for Foreign Currency Customer

  • Customer MC587 is based in Mexico and is associated with Foreign Currency MXN (Mexican Peso).
  • Create Order 66562 for Customer MC587.

  • Current FX Rate of 0.05483.
  • Add product B74548 which has Mexican Peso Multi-Currency Price & Cost already set up.
  • Automatically gets the Mexican Peso List Price of MXN 19,850.00.

  • Save Order redirects to the List Orders screen.
  • The List Orders screen shows the transaction with Currency=MXN and Order Total=39,700.

Fulfill then Invoice the Order

  • Move order to fulfillment then invoice it.
  • When the order is invoiced, the Invoice is recorded in the functional currency of USD.
  • The Invoice amount in USD at the MXN FX rate as of the Invoice Date = MXN 39,700 x 0.05483 = $2,175.56.
  • Creates a Mexican Peso Invoice that will be sent to the customer.
  • This is the foreign currency invoice.

  • All Sales reports run off Invoices in the functional currency.

GL Posting of Invoice

  • GL Posting (in USD functional currency) of Invoice 66562 is as follows:
    • Sales of 39,700 MXN with FX rate = 0.05483 posted as $2,175.56, and
    • Cost is already in USD (Avg Cost of $725.00) posted as $1,450.00.

Receive Payment of Invoice

  • Subsequently, receive payment of $2,177.94 from MXN 39,700 converted at then current FX rate of 0.05486.
  • Since AR amount is $2,175.56, creates a Gain on FX of $2.38.
  • Go to Receivables > Payment Receipts > List Payment Receipts > Add Payment.
  • Create a Payment Receipt 19987 with a “write-off” of -$2.38 (i.e., Gain) to 599-00 Gain/Loss on Forex Transactions.

GL Posting of Payment

  • This is the GL Posting of the Payment on the Invoice.

 

 

 

 

 

 

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