When you have your currencies, customer and supplier records and, if applicable, your foreign currency bank accounts set up you can begin to process transactions and work with foreign currency accounts. You will:
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Keep your exchange rates up-to-date.
- Place and pay for orders with suppliers who conduct their business in a foreign currency.
- Raise invoices and input payments from customers.
- Revalue your foreign bank accounts, supplier account balances and customer account balances so they reflect their true value.
Exchange calculations and multiple currencies
When there are multiple currencies involved in a transaction Sage 200 uses the exchange rates held on the Currencies & Exchange Rates screen. There are times when a user must calculate the amount that is to be posted. This is the case when the trader currency and the tendered currency are different.
The examples below explore and illustrate how Sage 200 calculates the amount to post and when your input would be required.
There are two currencies in this scenario. The company's base currency is pounds and it operates a euro bank account. It trades with a customer based in France.
- £ - The base currency of the company.
- € - The currency of the company's bank account.
- € - The currency in which the customer operates and transacts.
When the payment is posted
The receipt amount is posted to the trader's account and the bank account in euro with no conversion required.
Sage 200 uses the stated exchange rate to convert the euro payment to the base currency (£) and posts it to the nominal accounts.
There are three currencies in this scenario. The company's base currency is pounds and it operates a euro bank account. It trades with a customer who is based in Canada. The customer pays for an invoice in US dollars.
The three currencies involved in this scenario:
- £ - The base currency of the company and currency of their bank account.
- Ca$ - The currency in which the customer operates.
- US$ - The currency in which the customer pays for an invoice.
When the payment is posted
Sage 200 uses the stated exchange rate to convert the US dollar payment into base currency (pounds) and posts that amount to the bank account and nominal accounts.
The Sage 200 user must calculate and enter the value (in Ca$) of the US dollar payment that is posted to the customer's account.
While not a common scenario it is possible to have four different currencies involved in a transaction.
A company whose base currency is pounds operates a euro bank account. They trade with a customer who operates in Canadian dollars but pays for an order in US dollars.
The four currencies involved in this transaction:
- £ - The base currency of the company.
- € - The currency of the bank account into which receipts are paid.
- Ca$ - The operating currency of the customer.
- US$ - The currency used to pay a particular invoice.
When the payment is posted
Sage 200 uses the stated exchange rate to convert the US dollars payment to euros and posts that value to the bank account.
Sage 200 takes the euro value posted to the bank account and uses the stated exchange rate to convert that value to the base currency (£) and posts to the nominal accounts.
The Sage 200 user must calculate and enter the value (in Canadian dollars) of the US dollar payment that is posted to the customer's account.
What do you want to do?
Are you ready to perform these actions?
Have you completed the necessary setup so that you can perform the actions listed below?
Before you can work with foreign currencies there are a number of set up and configuration tasks you need to undertake so that the currencies, initial exchange rates and relevant bank, customer and supplier records are available.
For full details, see Set up foreign currencies.
- Update a single exchange rate
- Update a period exchange rate
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Review the history of an exchange rate
Open: Settings > Organisational and Financial > Currencies and Exchange Rates
- Go to the View Currency History tab.
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Select the currency from the Name list.
The history of the selected currency displays in the table.
You enter purchases and sales in foreign currencies in the same way as you enter base currency transactions. Having said that - when entering transactions in a foreign currency, remember:
- All transactions are posted to the nominal ledger in your base currency.
- Exchange rate fluctuations will affect the converted value of foreign currency transactions.
- Foreign currency transactions are automatically revalued when they are fully or part allocated. Any losses or gains made from the fluctuations in exchange rates are posted to your Exchange Differences nominal account.
- You can revalue outstanding amounts on your sales and purchase accounts.
- You can revalue the balance of your foreign bank accounts.
- You can process several foreign currency transactions in the Cash Book, using Grouped Transactions, provided all the transactions are of the same type, use the same currency and you have created a bank account with the same currency used for the transactions.
Over time, fluctuating exchange rates can affect the true value of the balances of those customers and suppliers who operate in a foreign currency and any foreign currency bank accounts you hold.
To reflect the true value of the balances of these accounts you can perform a revaluation exercise.
Actions you can take
Revalue a foreign currency bank account
Operating with foreign currencies
Other useful information