Example Multi-Currency Transactions

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Overview

This article explains how to create and post Billings, Cash Receipts, Payables, Cash Disbursements, and Journal Entries in foreign currencies when multi-currency is enabled in Accounting Seed. Each section walks through a complete end-to-end workflow using Euro-denominated transactions as examples.

In this article:

Create a Journal Entry in a Foreign Currency
Create a Billing in a Foreign Currency
Receive Payment and Apply a Cash Receipt in a Foreign Currency
Create a Purchase Order in a Foreign Currency
Create a Payable in a Foreign Currency
Create a Cash Disbursement in a Foreign Currency
Understanding Realized Gain/Loss on Currency Exchange

Before You Begin

Multi-currency must be enabled in both Salesforce and Accounting Seed before recording foreign currency transactions. Complete the steps listed in Enable Multi-Currency.
Update the Dated Exchange Rate Table before creating any transaction to ensure current rates are applied.
Confirm that the Currency Gain/Loss GL Account is configured in Default GL Accounts. See Default GL Accounts.
Review these important multi-currency fields on the various source documents (billings, payables etc):
- Set the Currency field based on the value required for the source document.
- The Currency Conversion Rate defaults from the Dated Exchange Rate Table, based on the selected Currency.
- The Ledger Amount shows the converted amount from the foreign currency to the corporate/base currency (Currency selected to the Ledger's currency), and this is the amount posted to the GL.

Create a Journal Entry in a Foreign Currency

When creating a Journal Entry in a foreign currency, the Currency Conversion Rate auto-populates from the Dated Exchange Rate Table. The Foreign Amount, Currency Conversion Rate, Ledger Amount, and Ledger conversion appear on the Transaction records linked to the Journal Entry Lines.

Example: The ledger currency is USD. You are recording a 100 EUR foreign fee. The currency conversion rate is 0.89.

Navigate to the Journal Entry tab and click New.
Enter a name for the Journal Entry, select the currency (EUR), select the Ledger (USD) and add Journal Entry Lines as you normally would.
Note that the value in the Currency Conversion Rate field (Ledger Currency:Foreign Currency) defaults from the Dated Exchange Rate Table, but you can overwrite this by entering a rate manually.
Click Post.

Create a Billing in a Foreign Currency

Creating a Billing in a foreign currency follows the same process as a standard Billing. Select the currency on the Billing record and the Currency Conversion Rate auto-populates from the Dated Exchange Rate Table.

Example: The ledger currency is USD. You are billing a customer 1000 CAD. The currency conversion rate is 0.76.

Navigate to the Billing tab and click New.
Select the currency (EUR). The Currency Conversion Rate auto-populates. Complete all remaining Billing fields as normal.
Add Billing Lines, then click Post.

Receive Payment and Apply a Cash Receipt in a Foreign Currency

Two methods are available for receiving payment on a foreign currency Billing. Update the Dated Exchange Rate Table before receiving payment to ensure current rates are applied.

Continuing from the Billing example above. Choose one of the following methods:

Method A: Receive payment directly on the Billing record (one-step process)
Method B: Create a Cash Receipt record, then apply it to the Billing (two-step process)

Method A: Receive Payment on the Billing Record

Navigate to the Billing record and click Receive Payment.
Select a Receipt Type from the drop-down. The detail panel opens automatically. Note: Select Electronic if using Stripe. Select Check for all other payment types.
Enter the required details: Amount, Receive Date, Payment Reference, and Bank Account. The Currency carries over from the Billing record, as do the Billing Total and Balance (both in the foreign currency).
Click Receive Payment.

When returned to the Billing record, review the following:

- The Balance has been reduced by the received amount.
- Both the Cash Receipt record and the Billing Cash Receipt record appear in the Applied Cash Receipts related list.
- Both records are automatically posted.
- Click the Cash Receipt name to see its GL Transactions recorded for the Cash Receipt.
- To see the currency gain or loss click the Applied To tab on the Cash Receipt then click the BCR-#### link to see the Billing Cash Receipt:

Method B: Create a Cash Receipt and Apply to a Billing

Navigate to the Cash Receipt tab and click New.
Select the currency matching the Billing. Complete all required fields.
Click Save, then click Post.
Click Apply/Unapply to apply the Cash Receipt to the Billing.
Review any currency gain or loss: Click the Applied To tab on the Cash Receipt then click the BCR-#### link to see the Billing Cash Receipt. (see above screenshot)

Create a Purchase Order in a Foreign Currency

The Currency Conversion Rate on a Purchase Order is determined by the rate on the Initial Inventory Receive Date, not the Purchase Order creation date. Update the Dated Exchange Rate Table before receiving inventory to ensure current rates are applied.

Note: A conversion rate can be entered directly on the Purchase Order and overrides the Dated Exchange Rate Table.

Example: The ledger currency is USD. The Purchase Order is created in EUR. The vendor invoices and expects payment in EUR.

Click the Purchase Order tab and click New.
Select the appropriate currency (Euro). The Currency Conversion Rate remains blank until set during the Receive process.
Add Purchase Order Lines and save the record.
Complete the Receive process: Fill in the Warehouse, Location, and Quantity that is being received. The Receive date default to the current date, but can be overridden.

The currency conversion rate used for Inventory and GL transactions is set based on the rate on the Initial Inventory Receive Date.

Purchase Order Lines:

As this is the Purchase Order Inventory Movement (PIM) for this Purchase Order, the Initial Receive Date and the Currency Conversion Rate are set and displayed:

All subsequent inventory receipts will use this Currency Conversion Rate and Initial Receive Date that was set by the first PIM.
Below shows the initial receipt of the first five (5) units for each of the purchased Products.

The related PIM shows the unit cost in USD. The Currency Conversion Rate of 0.89 is now set and will be used by all subsequent Purchase Order Inventory Movements on this Purchase Order until it is fully received.

The PIM will also trigger the weighted-average cost calculation. The new weighted-average cost is posted to the Inventory Cost object. (See Inventory Valuation - Weighted-Average Cost in the Knowledge Base for more details.) Here only the five (5) of the ten (10) ordered that were received are included in the weighted-average cost calculation.

The next Inventory Receipt, below, will use the same initial currency conversion rate that was set above on the PIM.

The PIM then triggers the weighted-average cost calculation. Here the last five (5) of the ten (10) ordered are received. Note that the weighted-average cost changed from the previous record.

Create a Payable in a Foreign Currency

Payables can be created from a Purchase Order (for inventoried products) or manually (for non-inventoried products). Update the Dated Exchange Rate Table before creating the Payable to ensure current rates are applied. A conversion rate can also be entered directly on the Payable, which overrides the exchange rate table.

Important Notes on Payables and Foreign Currency

If a foreign currency Purchase Order is received and then completely unreceived (all associated Purchase Inventory Movement records deleted), the Initial Receive Date is deleted. If the Payable was created before the Purchase Order was unreceived, re-receiving the Purchase Order at a different conversion rate (due to a different Initial Receive Date rate) may cause an out-of-balance condition. Take care to reconcile the rates between the original Payable and the re-received Purchase Order in this scenario.

Payables for Inventoried Products

Continuing from the Purchase Order example above. This process applies to inventoried products ordered on a Purchase Order.

Verify that the Purchase Order has been fully received.
From the Purchase Order record, click the Create Payable button.
On the Create Payable screen, review and update if needed, the Issue Date, the Due Date, and the Purchase Order Status. Next enter either the Quantity to Pay or the Amount to Pay. When complete, click on the Create Payable button.
The Payable is now displayed in Edit mode: note that the Currency and Currency Conversion Rate are filled in based on the Purchase Order and the Initial Receive Date that was set on the Initial PIM. The amounts, dates, and vendor detail are populated from the Create Payable input. The ledger will default to what is set up in the Default Ledger screen. Click Save and review the Ledger Amount and Currency Conversion Rate.
Post the Payable.

Note: For inventoried products, the GL debit posts to the Vouchers Payable GL Account.

Payable in Edit mode:

Payable record for inventoried product showing Ledger Amount and Currency Conversion Rate:

Payables for Non-Inventoried Products

For non-inventoried products, create the Payable manually from the Payable object. The Currency Conversion Rate is set based on the Payable Issue Date.

Navigate to Accounting Home > Create Entries menu > Payables and click New.
Complete all required Payable fields and remember to select the Currency.
Leave the Currency Conversion Rate blank to auto-populate from the Dated Exchange Rate Table based on the Issue Date. You can enter a rate manually to override the default.
Add Payable Lines with the appropriate non-inventoried products and their Expense GL accounts.
Click Post.

Note: For non-inventoried products, the GL debit posts to the Expense GL account set on the Payable Line.

New Payable record with foreign currency and Payable Lines:

Posted Payable GL transactions for non-inventoried product:

Create a Cash Disbursement in a Foreign Currency

Update the Dated Exchange Rate Table before issuing payment to ensure current rates are applied. A conversion rate can also be entered directly on the Cash Disbursement, which overrides the exchange rate table.

Method A: Pay a Payable

Continuing from the Payable example above.

Navigate to the Payable record and click Pay.
On the intermediate screen, review the Amount to Pay, the Currency Conversion Rate (defaults to the current rate and may differ from the Payable) and other fields.
When ready click Pay. The Cash Disbursement is created and applied to the Payable.
Review the Cash Disbursement for the Currency, Conversion Rate.
If the Currency Conversion Rate is different from the Payable's you can review the currency gain/loss transaction: click the Applied To tab on the Cash Disbursement, then click on the APD-#### link listed in the Invoices Applied To related list. The AP Disbursement shows the currency gain/loss transaction.

Intermediate Pay screen:

AP Disbursement shows the currency gain/loss transaction:

Method B: Apply a Cash Disbursement to a Payable

Navigate to the Cash Disbursement tab and click New.
Select the Currency matching the Payable and complete all required fields.
Click Save, then click Post.
Click Apply/Unapply then apply the Cash Disbursement to the Payable. Click Save & Complete.
On the Cash Disbursement, you can review any currency gain or loss: click the Applied To tab on the Cash Disbursement, then click on the APD-#### link listed in the Invoices Applied To related list. The AP Disbursement shows a currency gain/loss transaction if the Currency Conversion Rate is different on the day the Cash Disbursement is applied to the Payable. (see above screenshot)

Understanding Realized Gain/Loss on Currency Exchange

A realized gain or loss on currency exchange occurs when:

The exchange rate on the day the customer was billed differs from the rate when cash was collected.
The exchange rate on the day the vendor invoice was recorded (or the Initial Inventory Receive Date was recorded) differs from the rate when cash was paid to the vendor.

Accounting Seed automatically calculates and records realized gains or losses, posting them to the Currency Gain/Loss GL Account configured in Default GL Accounts.

Example: The Currency Conversion Rate was 0.89 when the Initial Inventory Receive Date was recorded. At the time of the Cash Disbursement, the rate was 0.75. This produces a conversion difference of $2,495.88, which is automatically posts to the Currency Gain/Loss GL Account.

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Example Multi-Currency Transactions

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