Multicurrency Payment of Invoices: To Pay a Foreign Currency Invoice by Using Another Currency

The following activity will walk you through the process of paying an invoice in a foreign currency by using another foreign currency.

Story

Suppose that on January 10, 2024, SweetLife Fruits & Jams provided consulting services to the EasyDiner customer in the amount of 50 euros (EUR in the system). By the end of January, the customer informed SweetLife that they were going to pay the invoice in Canadian dollars (CAD); SweetLife agreed to use for the payment the following exchange rate: 1 EUR = 1.51 CAD. On January 31, EasyDiner made the first partial payment in the amount of 20 euros.

Acting as a SweetLife accountant, you need to process the invoice and apply the payment to it. Then you need to print the multicurrency report to review the outstanding balance of the customer.

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 11000 (Accounts Receivable) and 83000 (Realized Gain/Loss Currency) accounts have been created.
  • On the Customers (AR303000) form, the EASYDINER customer has been predefined.
  • On the Payment Methods (CA204000) form, the WIRE payment method for wire transfers has been created.

Process Overview

In this activity, on the Invoices and Memos (AR301000) form, you will create and release an invoice in EUR. On the Payments and Applications (AR302000) form, you will partially pay this invoice in the amount of 20 EUR. Finally, you will print the multicurrency report on the AR Balance by Customer MC (AR633000) form to review the outstanding balance of the customer.

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 1/10/2024. If a different date is displayed, click the Business Date menu button, and select 1/10/2024 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 Set Up Refreshing of 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: Creating and Releasing an Invoice

To create an invoice in a foreign currency and release it, do the following:

  1. Open the Invoices and Memos (AR301000) form.
  2. On the form toolbar, click Add New Record, and in the Summary area, specify the following settings:
    • Type: Invoice
    • Customer: EASYDINER
    • Currency: EUR (automatically inserted; cannot be overridden)
    • Date: 1/10/2024
    • Post Period: 01-2024
    • Description: Consulting services
  3. On the Details tab, click Add Row, and in the added row, specify the following settings:
    • Transaction Descr.: Consulting services
    • Ext. Price: 50.00
  4. On the form toolbar, click Save.
  5. In the Summary area, click View Base (right of the Currency box), and review the invoice in the base currency (USD).

    The Detail Total in USD is $56.87, based on the currency exchange rate of the document (€50 * 1.13739763).

  6. On the form toolbar, click Remove Hold.
  7. On the form toolbar, click Release to release the invoice.

Step 2: Processing a Payment for the Invoice

To create a payment in a foreign currency and apply it to the invoice, do the following:

  1. Open the Payments and Applications (AR302000) form.
  2. On the form toolbar, click Add New Record, and in the Summary area, specify the following settings:
    • Type: Payment
    • Customer: EASYDINER
    • Payment Method: WIRE (inserted automatically when you selected the customer)
    • Cash Account: 10215WH (Checking Account CAD)
    • Currency: CAD (inserted automatically when you selected the cash account)
    • Description: Partial payment on consulting services
    • Application Date: 1/31/2024
    • Application Period: 01-2024
    • Payment Amount: 20.00

    On the Documents to Apply tab, the system has loaded the invoices you created for this customer in Step 1 of this activity and in a previous activity.

  3. Select the Included check box for the invoice dated 1/10/2024 to select it.

    The default cross rate for the payment application is calculated as the exchange rate of the invoice currency that was effective on the payment date divided by the currency rate of the payment: 1.424779... = 1.11520018 / 0.7827176.

    You have to override this rate to 1.51, which is the EUR-to-CAD rate that had been agreed on with the customer. Thus, the payment amount converted to CAD is C$30.20 (€20 * 1.51); this amount is not shown on the form.

  4. In the Cross Rate column, enter 1.51, and review the payment in the invoice currency and in the base currency.
  5. In the Amount Paid column for the invoice, specify 20.00.

    Based on the actual exchange rate on the date of the payment, the payment amount in USD is $15.65 (C$20.00 * 0.7827176).

    The balance that you see in the Balance column of the table for the invoice is the open amount of the invoice after you apply the payment, which is shown in the payment currency and is converted by using the cross rate: (€50.00 – €13.25) * 1.51 = C$55.50.

  6. On the form toolbar, click Remove Hold.
  7. On the form toolbar, click Release to release the payment.
  8. On the Financial tab, click the Batch Nbr. link.
  9. On the Journal Transactions (GL301000) form, which opens, review the GL transaction 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, which you created in Multicurrency Functionality: Implementation Activity) was debited in the amount of the payment that the system converted to the base currency by using the payment rate ($15.65 = Round (€20 * 0.7827176)).
    • The Accounts Receivable account of the customer (11000) was credited in the amount in the base currency deducted from the invoice balance ($15.06 = Round (Round (€20 * 1.13739505) / 1.51)) to decrease the customer's debt.
    • The realized gain/loss account of the document currency (83000, 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 amount of the payment in the base currency minus the amount in the base currency deducted from the invoice balance ($0.59 = $15.65 – $15.06).
    Note: If an invoice is issued in the base currency, no gain or loss will be realized on the payment, regardless of the currency of the payment.
  10. On the Invoices and Memos (AR301000) form, open the invoice to which you have applied the payment, and review the Applications tab.

    The payment in CAD with the amount equivalent to €20 was applied to the invoice. The balance of the invoice is currently €36.76.

Step 3: Printing the Multicurrency Report

To review the outstanding balance of all customers and print the multicurrency report, do the following:

  1. Open the AR Balance by Customer MC (AR633000) form.
  2. On the Report Parameters tab, specify the following settings:
    • Report Format: Open + Current Period
    • Company/Branch: HEADOFFICE
    • Financial Period: 01-2024
    • Include Applications: Cleared
  3. On the form toolbar, click Run Report and review the report.

    The report lists all the documents processed in the 01-2024 period, along with the documents that are open at the end of the period; the listed documents are grouped by customer. For each document, you can review the document balance in the document currency. Also, for each customer, you can review the total of the documents in each currency at the end of the period.