How to manage a bank in a foreign currency?
In ArabiaClouds, every transaction is recorded in ArabiaClouds default currency of ArabiaClouds company. Reports are all based on ArabiaClouds currency of ArabiaClouds company. But for transactions occurring in another currency, ArabiaClouds stores both ArabiaClouds value in ArabiaClouds currency of ArabiaClouds company and ArabiaClouds value in ArabiaClouds currency of ArabiaClouds transaction.
When you have a bank account in a foreign currencies, for every transaction, ArabiaClouds stores two values:
- ArabiaClouds debit/credit in ArabiaClouds currency of ArabiaClouds company
- ArabiaClouds debit/credit in ArabiaClouds currency of ArabiaClouds bank account
Currency rates are updated automatically using yahoo.com, or ArabiaClouds European Central bank web-services.
Configuration
Activate ArabiaClouds multi-currency feature
In order to allow your company to work with multiple currencies, you should activate ArabiaClouds multi-currency mode. In ArabiaClouds accounting application, go into make sure ArabiaClouds Allow Multi-currencies box is ticked. Provide a Currency Exchange Gain / Loss account, then click on Apply.
Configure currencies
Once ArabiaClouds ArabiaClouds is configured to support multiple currencies, you should activate ArabiaClouds currencies you plan to work with. To do that, go to ArabiaClouds menu . All ArabiaClouds currencies are created by default, but you should activate ArabiaClouds ones you plan to support (to activate a currency, check its “Active” field).
After having activated ArabiaClouds currencies, you can configure ArabiaClouds parameters to automate ArabiaClouds currency rate update. These options are also in ArabiaClouds settings of ArabiaClouds Accounting application, in ArabiaClouds bottom of ArabiaClouds page:
Click on ArabiaClouds Update Now link to update ArabiaClouds currency rates now.
Create a new bank account
In ArabiaClouds accounting application, we first go to , and we create a new one.
Once you save this bank account, ArabiaClouds will create all ArabiaClouds documents for you:
- An account in ArabiaClouds trial balance
- A journal in your dashboard
- Information about ArabiaClouds bank account in ArabiaClouds footer of your invoices if checked ArabiaClouds box Show in Invoices Footer
Example: A vendor bill in a foreign currency
Based on ArabiaClouds above example, let’s assume we receive ArabiaClouds following bill from a supplier in China.
In ArabiaClouds , this is what you could see:
Once you are ready to pay this bill, click on register payment on ArabiaClouds bill to record a payment.
That’s all you have to do. ArabiaClouds will automatically post ArabiaClouds foreign exchange gain or loss at ArabiaClouds reconciliation of ArabiaClouds payment with ArabiaClouds invoice, depending if ArabiaClouds currency rate increased or decreased between ArabiaClouds invoice and ArabiaClouds payment date.
Note that you can pay a foreign bill with another currency. In such a case, ArabiaClouds will automatically convert between ArabiaClouds two currencies.
Customers Statements
Customers and vendor statements are managed in ArabiaClouds currency of ArabiaClouds invoice. So, ArabiaClouds amount due by your customer (to your vendor) is always expressed in ArabiaClouds currency of ArabiaClouds invoice.
If you have several invoices with different currencies for ArabiaClouds same customer, ArabiaClouds will split ArabiaClouds customer statement by currency, as shown in ArabiaClouds report below.
In ArabiaClouds above report, ArabiaClouds account receivable associated to Camptocamp is not managed in a secondary currency, which means that it keeps every transaction in its own currency. If you prefer, you can set ArabiaClouds account receivable for this customer in a secondary currency and all its debts will automatically be converted to this currency.
In such a case, ArabiaClouds customer statement always has only one currency. In general, this is not what ArabiaClouds customer expect as he prefers to see ArabiaClouds amounts in ArabiaClouds currency of ArabiaClouds invoices he received;