An in-depth look at QuickBooks Multi-Currency functionality. Session will emphasise how to understand Multi- Currency reporting and how to avoid the common pitfalls. MultiCurrency Functionality. This presentation will Cover : Brief Overview on the setting up of Multi Currency
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An in-depth look at QuickBooks Multi-Currency functionality.
Session will emphasise how to understand Multi- Currency reporting and how to avoid the common pitfalls.
Expense account created when multicurrency is turned on "Exchange Gain/Loss
Register balance displayed in Foreign Currency
Customer Centre amounts displayed in Foreign Currency
Currency & Exchange Rate Box
If you do not want to record an exchange variance then use the same rate for both transactions.
GST rounding on Foreign Transactions (0.01) will be booked to Exchange Gain/Loss account
Exchange Loss $13.37
Invoice raised $US 1,650 incl GST @ 1.41068 NZ$916.94
Partial Payment received $US 650 @ 1.39010 NZ$903.57
Difference = Exchange Gain/loss Gain $13.37
This will create a discrepancy (value of Change) in the NZD$ balance. As the exchange Gain/loss calculated with the payment remains unchanged the Gain/loss is now incorrect. To fix this requires a Home Currency adjustment or to force a revalue of the exchange gain/loss by opening payment, untick invoice paid and then retick.
This will change the AVERAGE cost for the affected item as it revalues the transaction. This will change balances on Balance Sheet (Inventory asset) and Profit & Loss (Cost Of Goods Sold) if the item has been sold.
This causes discrepancies in the reports and to the calculation of the Exchange Gain/loss. If possible use the same exchange rate for Credit notes as the original transaction.
This willmake it easier to keep track on the accuracy of rates used on each transaction
The Exchange rate to use in this scenario is the actual as per bank statement. To calculate to the correct decimal places in order to match the bank statement, use the windows calculator. Divide the Foreign amount into NZD eg NZD$$ / USD$$ = Exchange rate
When Purchase Orders are converted into Bills the Exchange rate updates to the default Rate, this is not the case with Sales Orders. When SO are converted into Invoices the rate remains the same as SO rate. You are required to remember to update the Rate.
Tax Summary ,Tax detail & GST 101 reports display the total tax column $value incorrectly when a Tax code (S) is used in a Foreign Currency transaction and there is an Exchange rate change. It keeps the original NZD GST converted rate and only updates the net. Only affects Tax reports and not General ledger. Reports affected are all BAS Engine Reports. Eg. Tax Summary, Tax detail, BAS Engine. The Fix is to delete the tax code, tab and re enter Tax code for each line on transaction, RE SAVE. Only affects Foreign Currency transactions with Tax codes.
AR & AP ledgers need to be balanced to the Balance Sheet periodically (at least at End of Year)
In this scenario we are looking at Accounts receivable Scenario
Balance on 02/06 is US$1,000 NZ$1,410.68
Reports to set up to check balances:
1. Customer Balance Detail Report:
REPORT TO CONFIRM BALANCE OUTSTANDING in Foreign Currency AT A PRTICULAR DATE back in time
**MUST enter correct From & To Dates taking into account date of oldest transaction outstanding
2. Customer Balance Summary
3. A/R Ageing Summary
4. Customer Open Invoices
**Designed to display outstanding customer balance in NZD$ & not able to accurately display customer outstanding in foreign Currency as it does not take into account adjustment notes & Partial Payments.
-NZ$7.88 due to 7.88 Home currency adjustment
Balance of AR US$ in Balance Sheet will equal balance in Customer Summary Report. They show a balance of $7.88 NZD owing due to the discrepancy of the Exchange rate used on the Credit note as opposed to the invoice.
The Balance on Open Invoices, Balance Detail reports & Ageing Reports show Zero NZD as outstanding. This creates issues with Auditing as they compare Balance Sheet AR to AR Ageing report. Accountants need to compare Balance Sheet AR to Customer Balance Summary as these two reports should balance.
To balance this discrepancy a HOME CURRENCY ADJUSTMENT is required
To Revalue Foreign Accounts for end of period adjustments:
Decide on the period that is required for revaluation purposes
The report will revalue the Foreign accounts with the adjustments required
Enter the adjustment as a HOME CURRENCY ADJUSTMENT
AR & AP accounts will require a name to book the adjustment to.
I use US$ AR Revalue for AR. US$ AP Revalue for AP.
I reverse the revaluation at the beginning of the next period
Book the revaluation to an account Unrealised Gain/Loss Account
Presented by : Julie Gordon