Foreign Currency Payments in the Real World

Hi,

The adjustment you are referring to is only in the base currency and does not affect the value of the bank account in Euro.

At the end of the month, you typically have to revaluate the foreign bank account in the base currency using the Revaluate GL accounts screen.

By doing so, the end of month value of the base currency will be adjusted to present more accurate financial statements.

If the payment of the Bill in Euro has been made in USD, then, you would have to do a cash adjustment for the difference.  

Thanks for the rely ​@Eric Ratté 

I don’t think that I can rely on the Revaluate GL Accounts (DB000031) screen process at the end of the month to fix it because, as I understand it (and I’m an isolated American so I don’t know much about this 😀), the end of month process would hit an Unrealized Gain Account in the General Ledger while the process that I’m talking about should hit a Realized Gain Account in the General Ledger.

Hi Tim - for your scenario, if I have this correctly, you have a EUR bill, but your bank account that you’re paying it out of is in USD (or you’re sending USD to a payment processor to pay in EUR) so the issue is in the Cross Rate that’s being used on the payment not matching up.  If there was a way to generate the payment file to the payment processor without releasing it so that you could import/update the exchange rate directly would solve the problem I think?

Revaluate AR and AP go to unrealized and the end of month entries are reversed automatically because unrealized. While the Revaluate GL accounts can go to realized as per the configuration is different and these entries are not reversed.

Thanks for chiming in! Ya, if I didn’t release it, then I could come back and update the exchange rate on the Payment in Acumatica with the exchange rate that’s dictated by the Payment Processor before releasing the Payment in Acumatica.

But that feels funny to me from an internal controls perspective because there’s no solid audit trail. I could even delete the Payment in Acumatica after processing it with the payment processor. I guess I’m hunting for some authorization mechanism in Acumatica that can’t be modified. Maybe it’s a custom status on the Payment Record called Pending Processing which doesn’t allow the Acumatica Payment record to be deleted and the only thing that can be modified is the exchange rate.

​@TimRodman I agree on the lack of audit trail that the solution provides.  I’m not a customization expert, but there’s probably a way to somehow feed the rate back in automatically, but not sure how.  Unless you know the exchange rate in advance I’m not sure how you’d do it.

Hi ​@TimRodman were you able to find a solution? Thank you!

​@TimRodman I recently had this come up with a client with a similar issue (sending a USD wire payment out of a CAD bank account).  They noticed the issue as they were reconciling their first month in Acumatica.  The current (manual) process is we set up 2 Cash Entry Types (one receipt/one disbursement) for the realized fx gain/loss so that they can add these variances to the payments at the end of the month when they’re doing the bank reconciliation as we haven’t found a better way to handle this scenario.  I don’t love it because the gain/loss isn’t tied to the specific payment/vendor but it gets the expense to the right place and they can reconcile their bank account.  They don’t have a ton of these per month so it’s not a huge burden right now.  The other thing we’ve discussed with them is just leaving these payments “on hold” until the bank statement comes back so they can update the cross rate.

​@Chris Hackett ​@meganfriesen37 I haven’t found a great solution. I like Megan’s “on hold” solution best because then you can force the exchange rate to match. I haven’t done it, but I suspect you could do something pretty simple with the Workflow Engine by introducing a Status between On Hold and Released called something like Approved.

Then, if something is in an Approved status, you wouldn’t be able to put it back On Hold. You could only change the Exchange Rate and Release it.