AP Bills in Foreign Currencies: Process Activity

The following activity will walk you through the processing of an AP bill in a foreign currency.

Story

Suppose that on January 13, 2024, MapleLeaf Ads Co. provided services to the SweetLife Fruits & Jams company in the amount of 350 Canadian dollars (defined as CAD in the system), for which MapleLeaf billed SweetLife. On January 30, 2024, SweetLife paid this bill.

Acting as a SweetLife accountant, you need to create a bill and apply a payment in CAD (that is, in the same foreign currency) to the bill. Before you perform these actions, you will make changes to the MapleLeaf vendor’s settings so that bill processing can be performed in line with its currency-related preferences.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

  • On the Enable/Disable Features (CS100000) form, the following features have been enabled:
    • Standard Financials, which provides the standard financial functionality
    • Multibranch Support, which supports multiple branches in your instance of MYOB Acumatica
    • Multicompany Support, which supports multiple companies within one tenant.
    • Multicurrency Accounting, which enables multicurrency operations in the system
  • On the Companies (CS101500) form, the SWEETLIFE company has been defined.
  • On the Branches (CS102000) form, the HEADOFFICE branch of the SWEETLIFE company has been created.
  • On the Chart of Accounts (GL202500) form, the 20000 (Accounts Payable), 81000 (Other Expenses), and 42010 (Realized Gain CAD) accounts have been created.
  • On the Vendors (AP303000) form, the MAPLELEAF vendor has been predefined.

Process Overview

In this activity, you will first update the currency-related settings of the MapleLeaf Co. vendor on the Vendors (AP303000) form. On the Bills and Adjustments (AP301000) form, you will then create and release an AP bill in the CAD currency. You will then pay this bill on the Checks and Payments (AP302000) form.

System Preparation

Before you begin performing the steps of this activity, do the following:

  1. Launch the MYOB Acumatica website with the U100 dataset preloaded, and sign in as an accountant Anna Johnson by using the johnson username and the 123 password.
  2. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, make sure that the business date in your system is set to 1/13/2024. If a different date is displayed, click the Business Date menu button, and select 1/13/2024 from the calendar.
  3. On the Company and Branch Selection menu on the top pane of the MYOB Acumatica screen, make sure that the SweetLife Head Office and Wholesale Center branch is selected. If it is not selected, click the Company and Branch Selection menu button to view the list of branches that you have access to, and then click SweetLife Head Office and Wholesale Center.
  4. As a prerequisite activity, make sure that the multicurrency accounting functionality has been configured as described in Multicurrency Functionality: Implementation Activity and Configuration of Rate Types and Rates: To Configure Rates.
  5. As a prerequisite activity, make sure that you have configured an account as described in Multicurrency Cash Accounts: To Configure an Account.

Step 1: Updating the Vendor's Settings

To update the currency-related settings of the vendor (which has been preconfigured in the U100 dataset) in preparation for multicurrency bill processing, do the following:

  1. Open the Vendors (AP303000) form.
  2. In the Vendor ID box, select MAPLELEAF.
  3. On the Financial tab (Financial Settings section), do the following:
    • In the Currency ID box, select CAD.

      This is the primary currency to be inserted in bills and adjustments to this vendor.

    • Notice that the Curr. Rate Type box is empty, which is the default value of this setting copied from the settings of the vendor class.

      This setting specifies the currency rate type to be used for the vendor. Because you are not specifying a Curr. Rate Type for the vendor, the system will use the SPOT rate, which is set as the default rate for accounts payable on the Currency Management Preferences (CM101000) form.

    • Notice that the Enable Currency Override check box is cleared, which is the default state of the setting copied from the vendor class.

      With this check box cleared, you cannot override the currency in the bills and adjustments to this vendor. That is, the setting in the Currency ID box on this form for the vendor is the only currency that may be used in documents for this vendor.

    • Make sure that the Enable Rate Override check box is cleared.

      With this check box cleared, you cannot override the rate type and exchange rate in documents created for this vendor.

  4. On the Payment tab (Default Payment Settings section), specify the following settings:
    • Payment Method: WIRE
    • Cash Account: 10215WH (Checking Account CAD)
  5. On the form toolbar, click Save to save your changes.

Step 2: Creating and Releasing a Bill

To create and release a bill in the CAD currency, do the following:

  1. Open the Bills and Adjustments (AP301000) form.
  2. On the form toolbar, click Add New Record, and in the Summary area, specify the following settings:
    • Type: Bill
    • Vendor: MAPLELEAF
    • Currency: CAD (inserted automatically when you selected the vendor)

      The CAD currency is selected in the bill because you have assigned this currency to the vendor. Thus, the document amounts are specified in Canadian dollars. You cannot override the currency in this particular bill because the Enable Currency Override check box is cleared for the vendor on the Vendors (AP303000) form.

    • Date: 1/13/2024
    • Post Period: 01-2024
    • Description: Services
  3. On the Details tab, click Add Row, and in the added row, specify the following settings:
    • Transaction Descr.: Services
    • Ext. Cost: 350.00
  4. On the form toolbar, click Save.
  5. In the Summary area, click the Exchange Rate box (right of the Currency box), and review the Rate Selection dialog box, which opens. The Curr. Rate Type ID (SPOT) is the default rate type determined by the AP Rate Type setting on the Currency Management Preferences (CM101000) form, because you haven't specified a rate type in the vendor record. The currency rate of the SPOT rate type for 1/13/2024 is the currency rate that is effective starting on 1/1/2024. You cannot override the rate type and rate in this document because the Enable Rate Override check box is cleared for the vendor on the Vendors form.
    Tip: Any time you need to check which currency rate was effective on a particular date, on the Currency Rates (CM301000) form, you can select the needed date in the Effective Date box and review the Effective Currency Rates tab.
  6. Click OK to close the Rate Selection dialog box.
  7. In the Summary area, click the View Base button (right of the Currency box) to review the bill amounts in the base currency (USD). For converting the bill amounts, the system uses the CAD-to-USD rate that was effective on the bill date; thus, the detail total is C$350.00 * 0.78907914 = $276.18.
    Note: You can edit amounts in the document only while viewing the document in the document currency. When you are reviewing the document in the base currency, you cannot modify the document amounts.
  8. On the form toolbar, click Remove Hold.
  9. On the form toolbar, click Release to release the bill.
  10. On the Financial tab, click the Batch Nbr. link.
  11. On the Journal Transactions (GL301000) form, review the generated GL transaction in the foreign currency of the document (CAD) and in the base currency (USD).

    When the system released the transaction:

    • The AP account specified in the bill (20000) was credited in the amount of the bill, which the system converted to the base currency by using the rate specified in the bill (Round (C$350.00 * 0.78907914) = $276.18).
    • The expense account specified in the document line (81000) was debited in the line amount (Round (C$350.00 * 0.78907914) = $276.18).

Step 3: Applying a Payment in the Same Foreign Currency to the Bill

To apply a payment in the same foreign currency to the bill, do the following:

  1. While you are still on the Bills and Adjustments (AP301000) form with the bill opened, on the form toolbar, click Pay. The Checks and Payments (AP302000) form opens.
  2. In the Summary area of this form, specify the following settings:
    • Application Date: 1/30/2024
    • Application Period: 01-2024

    The payment is created in CAD, because the cash account denominated in CAD is specified as the default payment account for the vendor.

  3. Click View Base (right of the Currency box), and review the payment in the base currency. The payment amount in USD is $273.95 (C$350 * 0.78271760, which is the CAD-to-USD exchange rate that was effective on the payment date 1/30/2024).
  4. On the form toolbar, click Remove Hold.
  5. On the form toolbar, click Release to release the payment.
  6. On the Financial tab, click the Batch Nbr. link.
  7. On the Journal Transactions (GL301000) form, which opens, review the generated GL transaction in the document currency (CAD) and in the base currency (USD).

    When the payment was released, the following actions were performed in the system:

    • The checking account specified in the payment (10215) was credited in the payment amount, which the system converted to the base currency by using the payment rate as follows: $273.95 = Round (C$350 * 0.78271760).
    • The Accounts Payable account specified in the bill (20000) was debited in the payment amount applied to the bill; the system converted the payment amount to the base currency by using the rate specified in the bill ($276.18 = Round (C$350 * 0.78907914)).
    • The realized gain account of the document currency (42010), which you specified when you defined the currency in Multicurrency Functionality: Implementation Activity, was credited in the amount of the realized gain, which is the result of the difference between the rates specified in the bill and in the payment. The payment rate is less than the bill rate, so the result of applying the payment is a gain in the amount of $2.23 ($276.18 – $273.95).