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Clear FX difference


Userlevel 1
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Hi,

 

In a foreign currency supplier account, the invoice was entered at one rate, but was paid at a different rate on later date. The foreign currency amount clears off fine, but in the Supplier account, it is leaving a balance in the home currency.

What would be the best way to write off this difference to bring the account down to $0 balance in both foreign currency and home currency?

 

 

Thanks in advance,

Lawrence

 

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Best answer by Adam Bereda 12 May 2020, 17:30

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Userlevel 5
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IFS10 - I would roll back the supplier payment (if able), add a payment tolerance to the supplier and reapply the payment.  The posting should take care of the currency gain/loss.

 

Userlevel 1
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IFS10 - I would roll back the supplier payment (if able), add a payment tolerance to the supplier and reapply the payment.  The posting should take care of the currency gain/loss.

 

Would the roll back still work if the payments were done in a previous period which is already closed? Currently using IFS 9, not sure how different it would be.

Is there an option to raise a $0 foreign currency payment, with $12.93 in home currency (coded to fx difference), and match/offset the 3 transactions to clear the account off to zero?

 

Userlevel 1
Badge +3

IFS10 - I would roll back the supplier payment (if able), add a payment tolerance to the supplier and reapply the payment.  The posting should take care of the currency gain/loss.

 

Attached image that hopefully helps explain the current situation

Userlevel 5
Badge +10

I cannot speak to the roll back after period in IFS9.  It is an option to try.

 

You could create a negative manual supplier invoice (a credit) in the home currency and then offset the balance to the ‘credit’ you created in the system.   An offset has to net ‘zero’.

 

Best-

Userlevel 7
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Hi,

Guessing from your screenshot attached, you just need to create manual payment: offset and include two open items you present here in this offset. Currency difference will be managed automatically.

Userlevel 1
Badge +3

Hi,

Guessing from your screenshot attached, you just need to create manual payment: offset and include two open items you present here in this offset. Currency difference will be managed automatically.


Hi Adam,

 

That sounds exactly like what I'm after! I’ve been able to do this in other ERP systems in the past, but am new to IFS 9, so am having trouble finding the right session for the offset. Would the attached image be the right place to look at? (Accounts Payable > Manual Payment > Supplier Offset) Or is there another session which would be more appropriate?

Would IFS allow me to manually enter in which ledger to write off the difference to? And the Dr/Cr as well?

 

Thanks,

Lawrence

 

 

Userlevel 7
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Yes, that’s the right place. 

Posting types PP12 and PP13 are responsible for currency gain and loss postings, you may check their setup in Accounting Rules/ Posting control to see where difference will go.

Userlevel 1
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Yes, that’s the right place. 

Posting types PP12 and PP13 are responsible for currency gain and loss postings, you may check their setup in Accounting Rules/ Posting control to see where difference will go.

 

Is there a way to offset invoice and payment done in different currencies?

Invoice was entered in NZD currency (1st line in attached) and payment was made from the USD bank account (2nd line in the attached picture). The home currency is in AUD which is where there is a balance outstanding.

Under Supplier Offset, offset can only be done when invoice and payment is in the same currency. Is there anyway to work around this in IFS?

 

Thanks, Lawrence

Userlevel 7
Badge +12

Hi,
You can use mixed payment on netting cash account. Make sure opening and closing balance of mixed payment is zero. 

You can either create two supplier payment transaction lines, one in NZD and the other in USD, and play with currency rate (I would recommend to keep payment = original currency rate at USD line, maintaining amount in AUD = accounting currency as on payment line, i.e. 10915.69, and adjust amount in AUD on invoice line to match payment amount and recalculate NZD rate). 

Alternatively you can create single supplier payment transaction line in AUD and with payment amount zero, under transaction matching add these two open items and align exchange rates to eliminate remaining amount. This way is a little more complex.

Difference between those two is the way postings are created on PP1 posting type (netting) - using second option you are eliminating postings in foreign currency here.

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