Multicurrency Payment of Bills: To Pay a Foreign Currency Bill by Using Another Currency

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

Story

Suppose that on January 17, 2024, SweetLife Fruits & Jams purchased consulting services from Big Green Trucks Ltd. in the amount of 220 euros (€220). (EUR is a foreign currency of the company.) On January 30, SweetLife agreed with the vendor to pay half of the bill in CAD (which is the other foreign currency of the company) by using the 1.50 exchange rate (1 EUR = 1.50 CAD), so that the partial payment amount would be C$165.

Acting as a SweetLife accountant, you need to process the bill in EUR, partially pay it with a payment in CAD, and then print a multicurrency report. Before you perform these actions, you will make changes to the Big Green Trucks Ltd. vendor’s currency-related settings, which you initially specified in Multicurrency Payment of Bills: To Pay a Foreign Currency Bill by Using the Base Currency, to allow the vendor’s preferred currency to be overridden.

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), 83000 (Realized Gain/Loss Currency) accounts have been created.
  • On the Vendors (AP303000) form, the GREENTRUCK vendor has been predefined.

Process Overview

In this activity, Vendors (AP303000) form, you will update the currency-related settings of the vendor to prepare it for bill processing. On the Bills and Adjustments (AP301000) form, you will create and release a bill in EUR. On the Checks and Payments (AP302000) form, you will partially pay the bill in CAD, and review the generated GL transaction on the Journal Transactions (GL301000) form. On the Bills and Adjustments form, you will review the balance of the partially paid bill. Finally, you will run the AP Balance by Vendor MC (AP633000) report to review the outstanding balances of vendors.

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 1/17/2024. If a different date is displayed, click the Business Date menu button, and select 1/17/2024 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 vendor’s currency-related settings (which you updated in Multicurrency Payment of Bills: To Pay a Foreign Currency Bill by Using the Base Currency) to make it possible to process a bill in EUR, do the following:

  1. Open the Vendors (AP303000) form.
  2. In the Vendor ID box, select GREENTRUCK.
  3. On the Financial tab (Financial Settings section), make sure that CAD is selected in the Currency ID box. This is still the vendor’s preferred currency.
  4. Select the Enable Currency Override check box. With this change, although CAD will still be initially inserted into bills and adjustments of the vendor, the currency can be overridden (as it will be in this activity to EUR).
  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 EUR 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: GREENTRUCK
    • Currency: EUR
    • Date: 1/17/2024 (inserted automatically)
    • Post Period: 01-2024 (inserted automatically)
    • 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. Cost: 220.00
  4. On the form toolbar, click Save.
  5. In the Summary area, click View Base (right of the Currency box), and review the bill in the base currency. The Detail Total in USD is $251.14 (Round (€220 * 1.14155251), where 1.14155251 is the current EUR exchange rate effective on the bill date). You cannot override the document rate, because the Enable Rate Override check box is cleared on the Vendors (AP303000) form for the vendor.
  6. On the form toolbar, click Remove Hold.
  7. On the form toolbar, click Release to release the bill.

Step 3: Creating a Partial Payment for the Bill

To create a partial payment for the bill, do the following:

  1. Open the Checks and Payments (AP302000) form.
  2. On the form toolbar, click Add New Record, and in the Summary area, specify the following settings:
    • Type: Payment
    • Vendor: GREENTRUCK
    • Payment Method: WIRE (inserted automatically when you selected the vendor)
    • Cash Account: 10215WH (Checking Account CAD)
    • Currency: CAD (inserted automatically based on the selected cash account)
    • Application Date: 1/30/2024
    • Application Period: 01-2024
    • Description: Partial payment on consulting services
    • Payment Amount: 165.00
  3. On the table toolbar of the Documents to Apply tab, click Load Documents. The bill dated 1/17/2024, which you created in Step 2, appears in the table.

    The calculated cross rate from CAD to EUR is 1.42477975 (1.2776 / 0.8967, which is the CAD rate that was effective on the payment date divided by the EUR rate that was effective on the payment date). The amount to be paid in EUR is the Amount Paid divided by the Cross Rate and is currently €115.81 (Round (C$165 / 1.42477975)).

  4. Enter 1.50 in the Cross Rate column to change the cross rate to the one agreed on with the vendor, and enter 165.00 in the Amount Paid column. The Balance of the bill after payment will be €110.
  5. On the form toolbar, click Remove Hold.
  6. On the form toolbar, click Release to release the payment.
  7. On the Financial tab, click the Batch Nbr. link.
  8. On the Journal Transactions (GL301000) form, which opens, review the generated batch in the base currency.

    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 credited in the amount of the payment, which the system converted to the base currency by using the payment rate ($129.15 = Round (C$165 * 0.7827176)).
    • The Accounts Payable account of the vendor (20000) was debited in the amount in the base currency deducted from the balance of the bill ($125.57 = Round (Round (C$165 / 1.5) * 1.14155251)).
    • The realized gain/loss account of the document currency (83000), which you specified when you defined the EUR currency in Multicurrency Functionality: Implementation Activity) was debited in the amount of the realized loss, which is the amount of the payment in the base currency minus the amount in the base currency deducted from the balance of the bill ($3.58 = $129.15 – $125.57).

Step 4: Reviewing the Bill Balance

To review the balance of the partially paid bill, do the following:

  1. Open the Bills and Adjustments (AP301000) form.
  2. Open the bill to which you have applied the payment and review the Applications tab.

    The payment in CAD with the amount equivalent to €110.00 (C$129.15) was applied to the bill. The open balance of the bill is €110.00; that is, half of the bill was paid with the payment.

Step 5: Printing a Multicurrency Report

To review the outstanding balance for the vendors and print a multicurrency report, do the following:

  1. Open the AP Balance by Vendor MC (AP633000) form.
  2. On the Report Parameters tab, specify the following parameters:
    • Report Format: Open + Current Period
    • Company/Branch: HEADOFFICE (SweetLife Head Office and Wholesale Center) (inserted by default)
    • Financial Period: 01-2024 (inserted by default)
    • Vendor: Empty
    • Include Applications: Cleared
  3. On the form toolbar, click Run Report.
  4. Review the generated 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 documents are grouped by vendor. For each document, you can review the document balance in the document currency. Also, for each vendor, you can review the total of the documents in each currency at the end of the period.

    Note:
    In a production environment, you would click Print on the form toolbar to print the multicurrency report.