Exchange on Vendor Part Invoices

Process for Exchange on Vendor Part Invoices


Process for Exchange on Vendor Part Invoices

Vendor Invoice Currency Exchange:
A new system setting “Default Exchange Expense GL Account” has been added.
When a part invoice of a foreign vendor (with currency exchange rate other than 1) is Stocked/Posted, three GL entries will be generated per part line item instead of two:

• Crediting “Accrued Purchase Order Offset GL Account” for the amount of the line item total in foreign currency
• Crediting/debiting “Default Exchange Expense GL Account” for the difference between line item total in foreign currency and local currency
• Debiting “Default PO Part GL Account” for the amount of the line item total in local currency

How To:
Whenever a Part Vendor Invoice was processed for a Foreign Currency Vendor the user was required to manually enter two additional Miscellaneous line items in order to properly account for the converted cost which was added to the Part Inventory Item records.
The previous entries would have looked something like this:



You will no longer be required to make any manual entries to account for converted costs in the Part Inventory Item records as the system will take care of them automatically.
Using the new system setting called “Default Exchange Expense GL Account”, the system will make the appropriate accounting entries to account for the converted costs. This way the Part Inventory GL account will update with the exact same amount that the Part Inventory Records were.

Now you only need to stock/post the invoice and the GL Transactions for that invoice will reflect the extra GL entries required for the exchange conversion as seen here: