Premium 2011
Foreign
Currency
Contents
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Foreign Currency: Overview 3
Foreign Currency: Set Up 4
To Create a Foreign Currency Bank Account
6
To Set Up Foreign Currency LINKED Accounts
7
Creating a Foreign Currency Customer Record
8
Entering a Sale to a Foreign Currency Customer 9
Foreign Currency: Relevant Reports
•
•
•
Customer Aged Report
10
Realized Exchange Gain/Loss
11
Unrealized Exchange Gain/Loss
12
Slideshow 14
Foreign Currency:
Overview
If you have customers or vendors that
reside in another country, Sage Simply
Accounting can be set up to account
for operations in a foreign currency.
This allows you to create foreign
currency bank accounts, add foreign
prices to your inventory and service
items, pay bills and receive payments
without having to manually convert the
amounts to or from another currency.
You can display reports with amounts
in both the foreign currency and the
equivalent in your home currency.
You can set up as many currencies as
you need if you are using the Premium
or more advanced versions of Sage
Simply Accounting; otherwise, you can
only set up one other currency.
Click.
Our company in this chapter uses
Canadian dollars as its home
currency, and U.S. dollars as a
secondary currency.
Click to continue.
Foreign Currency: Setup
There would very likely be a difference
between the value of the home and the
foreign currency in the world market,
which may vary from one day to the
next. In this particular case, the
exchange differences will be recorded
in account 5400 US EXCHANGE
GAIN/LOSSES (see arrow).
Click the EXCHANGE RATE button (lower
right corner).
On the Exchange Rate page, you
would specify the foreign currency and
check the box to display a reminder if
the exchange rate is… then select a
time frame from the drop-down list.
One Day is the preferred choice.
Click to continue.
Foreign Currency: Setup
(continued)
In the Exchange Rate window, you
can set up a link to an exchange rate
Web site and a reminder to update the
exchange rate of a foreign currency
each day. As an example, you will use
the web site www.x-rates.com. You
may find other suitable sites. To open
the web site, click the World Wide Web
icon (see arrow)
Click the WWW icon now.
When the web page appears, set the
proper specifications.
Click GO (see arrow).
You will find the exchange rates for
various currencies. Note the date at the
bottom. This is very important when
you update the Exchange Rate
window.
Also note that you can download the
table to Excel.
Click.
Study the updated Exchange Rate
window.
Click to continue.
Feb 28, 2011
To Create a Foreign Currency
Bank Account
Once you establish a relationship with a
vendor or customer that uses a different
currency, you should consider opening a
foreign currency bank account to avoid
having to convert from one currency to the
other every time you buy or sell goods.
Not only does this process take time, but
it also exposes you to unexpected jumps
in currency rates. Plus, you must also pay
exchange fees and wire transfer fees
when you pay with your home currency
bank account.
Opening a foreign currency bank account
simplifies your transactions with foreign
vendors and customers by working in that
one specific currency. Study the Account
page for the US CHEQUING account.
Click CLASS OPTIONS.
If you click Change the Next Cheque
Number (see arrow)
Click it now.
…it will take you to the Report & Form
Options window where you can enter the
starting cheque number (see arrow).
Click to continue.
To Set Up Foreign
Currency LINKED Accounts
After you have added a foreign
currency bank account, you can
choose the linked accounts you
want to use to track foreign
currency transactions. Later, you
will set up your inventory pricing,
and add foreign vendors and
customers.
Click.
Study the Linked Accounts
settings.
Click to continue.
Creating a Foreign Currency
Customer Record
When working with foreign currencies,
you cannot change the currency
associated with existing customers.
Therefore, if you have a customer with
whom you deal both in Canadian and
foreign currency, you need to enter a
new customer record for when the
transaction is in a foreign currency.
You cannot assign a foreign currency
to a one-time customer.
Follow the usual procedure when
creating a customer record, except:
1. Specify the foreign currency code
in the Currency box (see top right
arrow) on the Options page. Notice
that the Balance Owing are shown
both in the home currency and the
foreign currency (see bottom
arrows).
Click the TAXES tab.
2. Keep in mind that foreign sales are
tax exempt. Study the Taxes page at
the right.
Click to continue.
Entering a Sale to a
Foreign Currency
Customer
Depending on whether you select a
foreign customer, Sage Simply
Accounting automatically uses the
appropriate currency on the
invoice.
Click.
Notice that the TOTAL of the
invoice is automatically shown in
USD, as specified earlier in the
customer’s Receivable Ledger.
Click.
Study the resulting Sales Journal
Entry. Notice that the debits and
credits are in the home currency,
but the Foreign Amt column
shows the foreign currency
equivalence.
Click.
Also notice the exchange rate
notation, which is automatically
taken from the Exchange Rate on
the date of the invoice.
Click to continue.
Multicurrency: Relevant
Reports (continued)
Unrealized Exchange
Gain/Loss
This report lists the value of foreign
currency accounts based on the
original exchange rate of each
transaction and then recalculates
their value based on the exchange
rate you enter. All transactions
dated after the date you choose for
the report are left out of the
calculation.
You can use this report to see the
value of your foreign accounts
based on a changing exchange
rate. Transactions are excluded so
that you can easily see an
account's balance on any day.
The amount gained or lost due to
changes in the exchange rate is
listed in a separate column.
Note: There are no figures for
United States Dollars under
ACCOUNTS PAYABLE because
there were no foreign currency
purchases recorded.
Click to continue.
More…
Go back to your text and
proceed from where you have
left off.
Press ESC now, then click the
EXIT button.
EXIT