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This text refers to program version 8.4  

Using Currencies in Invoices and Other Sub System Transactions - Exchange Rates using the Dual-Base System

Using the Invoice as an example, this page describes Exchange Rates and the Dual-Base conversion system in Sub System Transactions.

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When you create a new Invoice and specify a Customer, the Currency and all conversion rate fields will immediately be filled automatically. The Currency will be visible in the footer of the Invoice, and will be chosen as follows:

  1. The Sales Currency on the 'Pricing' card of the Contact record for the Customer will be used. In this case you will not be able to choose another Currency in the Invoice.

  2. If you have not specified a Sales Currency for the Customer, the Default Base Currency will be used, taken from the Base Currency setting in the System module. Usually this will be your home Currency. In this case, you can substitute any other Currency if necessary.

The Currency will also be visible on the 'Currency' card of the Invoice, together with the conversion rate applying on the Invoice date:

In this example, the home Currency (Base Currency 1) is GBP and Base Currency 2 is the Euro. The Invoice has been issued in a third Currency, JPY.

The fields on the right show the exchange rate between the foreign Currency and Base Currency 1, taken from the record in the Exchange Rate register applying on the Invoice Date. Here, JPY 147.62190 buys GBP 1.00. These fields will only be used if the Currency of the Invoice is not Base Currency 1 or 2.

As the Exchange Rate relates the foreign Currency to Base Currency 1, prices in the Invoice will be calculated by applying the exchange rate ratio to each Item's normal price (chosen as described here and subsequent pages). In this example, an Item's normal price will be multiplied by 147.62190. As with the simple conversion system, no conversion or recalculation will occur if you have assigned a Price List to an Invoice, and the Price List and Invoice are in the same Currency.

The fields on the left show in the form of a ratio the exchange rate between the two Base Currencies (taken from the Base Currency Rates setting). These fields will be used in every Invoice. When an Invoice is posted to the Nominal Ledger, every posting in the resulting Nominal Ledger Transaction will contain values in both Base Currencies. This exchange rate between the two Base Currencies will be used to calculate the values in Base Currency 2.

In a country that is passing through the process of replacing its home Currency with the Euro, direct conversions from the home Currency to any foreign Currency except the Euro are not possible. Instead, the home Currency should first be converted to the Euro (Base Currency 2), and there should then be a second conversion to the foreign Currency. In this situation, the Exchange Rate should therefore relate the foreign Currency to Base Currency 2. In the historical example illustrated below, an Invoice has been raised in JPY. Base Currency 1 is the home Currency (EEK, Estonian Kroon) and Base Currency 2 is the Euro:

The illustration shows the two-stage currency conversion applicable to transactions between two EU countries: the right-hand fields show that JPY 109.08972 buys one Euro (Base Currency 2), while the left-hand fields show that one Euro buys EEK 15.6466 (Base Currency 1, the local Currency). This establishes a conversion rate between JPY and EEK. When Items are added to the Invoice, their prices will first be converted from EEK to Euros and from there to JPY (unless a Price List in JPY has been assigned to the Invoice).

You can change the conversion rates in an individual Invoice, unless you have prevented this by selecting the Prevent Base Rate Changes and/or Prevent Foreign Rate Changes options in the relevant Currency record. The Prevent Base Rate Changes option governs the fields on the left (the exchange rate between the two Base Currencies), while the Prevent Foreign Rate Changes option governs the fields on the right.

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Using Currencies in transactions of various kinds:

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