If you are paying Purchase Invoices in a foreign Currency, it may be necessary to calculate a rate loss or gain. By the time the payment in currency is made, it may convert to a different amount in your home Currency compared to the Invoice. So, in order for the debit posting to the Creditor Account to be balanced by the credit posting to the bank, a rate loss (or gain) must be credited (or debited) to a third Account (for Exchange Rate losses and gains). In fact it is possible to have separate Accounts for rate losses and rate gains. These Accounts are specified on card 2 of the Accounts Usage P/L setting. It is usually against the exchange rate that the balancing must take place:bank fees and the amount paid are not usually changeable.

In the Nominal Ledger Transaction created from a Payment in Currency, that Currency together with the Exchange Rate used will be noted in the Text field.

More details about Payments in Currency can be found here.

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