Sage 200 holds the exchange rates from foreign currencies to your base currency. It does not hold exchange rates between one foreign currency and another. If your bank account is in one foreign currency and payment or receipt to the account is in another foreign currency, an overall conversion rate is calculated for the transaction using triangulation of currencies.
In most cases, triangulation is calculated to your base currency to determine the exchange rate to be used for the transaction. That is, the rate from each currency to your base currency will be calculated to produce an overall conversion rate that is then used to convert the transaction amount.
When a transaction involves a transitional euro currency, the conversion must always be calculated with the euro. The rate from each currency to the euro is calculated to produce an overall conversion rate. This rate is then used to convert the transaction amount.
Note: The conversion rates used in this example are not indicative of today's rates. You need to obtain up-to-date rates for conversion between UK pounds and other currencies in the normal way.
In this example:
- The base currency is GB pounds (£).
- The bank account is US dollars ($).
- A payment is received in Canadian dollars ($).
Sage 200 converts the currencies in the following way:
- The payment currency is converted into base currency. In this example the 15,000 Canadian dollars are converted into pounds sterling by:
- Dividing 15,000 by 1.742800 (the Canadian dollars to pound sterling exchange rate). This gives 3,480.170760 pounds sterling.
Rounding to 4 decimal places (3 or more decimal places are allowed).
Note: The result of step 1 can have a large number of figures following the decimal point. You can round up the figure, but to no less than three decimal places (0.123456789 may be rounded to 0.123, 0.1235 or 0.12346 and so on, but not to 0.1 or 0.12).
- The result of step 1 (the pounds sterling value) is converted into the bank currency, multiplying by the conversion rate. So 8,606.8396 pounds sterling is converted into US dollars, by:
- Multiplying 8,606.8396 by 1.573000 (the US dollars to pounds sterling exchange rate) to give 13,538.5586908 US dollars.
- The result of step 2 (the US dollars value) is rounded to the nearest sub-unit of the currency denomination. For dollars, this is to the nearest cent.
- Rounding 13,583.5586908 to the nearest cent, gives a result of 13,538.56 dollars.
If you followed this example you would see the following figures on the Amend Exchange Rate screen:
When entering the payment, click the Exchange Rate box to access the Amend Exchange Rate window.