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Foreign currency transactions
The Sales and Purchase Ledgers and Cash Book operate in both base and foreign currencies. Sage 200 can hold up to 100 currencies. One currency is your base currency and the remaining 99 can be used for the foreign currencies in which your suppliers and customers operate.
Foreign currency transactions are entered in the same way as your base currency transactions. You can enter sales and purchase transactions in foreign currency either through the sales or purchase ledgers, or through the cash book.
When entering transactions in a foreign currency:
- The sales and purchase ledgers and cash book use the transaction exchange rate to calculate the value of your foreign currency transaction in your base currency. This exchange rate is taken from the exchange rate table in the Accounting System Manager module.
- The transactions are subject to constant exchange rate fluctuations which affect the stored transaction values.
- The transactions are automatically revalued when they are fully or part allocated. Any losses or gains made from the fluctuations in exchange rates, are posted to your exchange differences nominal account.
- The transactions are posted to the nominal ledger in your base currency.
- You can revalue outstanding amounts on your sales and purchase accounts by using the Foreign Account Revaluation option in the Sales and Purchase Ledger.
Note: If you do not have the Foreign Account Revaluation setting selecting in Sales and Purchase Ledgers, you can enter the loss/gain on exchange when you enter the transaction.
- You can revalue outstanding amounts on your bank accounts, using the Foreign Bank Revaluation option in the Cash Book.
- You can process several foreign currency transactions in the Cash Book, using Grouped Transactions, provided all the transactions are of the same type, use the same currency and you have created a bank account with the same currency used for the transactions.
What you cannot do, when entering transactions in a foreign currency
- Use Reverse Transactions with foreign currency transactions. If an error has been made, you must post an opposite entry. For example, a credit note reverses an invoice. However, you must take into consideration the exchange rate and any revaluation performed on the original transaction.
- Pay foreign suppliers, using e-banking.
Before you begin
You must have:
- Set the currency descriptions and exchange rates for foreign currency accounts.
- Created foreign currency bank accounts.
- Created customer account records for customers who operate in foreign currency.
- Created supplier account records for suppliers who operate in foreign currency.
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