Foreign Currency Invoicing

PointForce Enterprise allows you to invoice Customers in their own currency. Their Customer account is updated and reported in foreign dollars but supporting Sales statistics are converted and updated in domestic dollars.

Required Set Up:

  • Every Customer is assigned a 'Bank Code' in Maintain Customer Master (SU13/OE/AR). The Bank Code, which is defined in Maintain Bank Codes (AR02), identifies the G/L control accounts for Accounts Receivable, Bank, Discount and Exchange that are applicable when Sales are made to the Customer. The Accounts Receivable and Bank control accounts in the G/L must be unique in order to keep foreign receivables and bank balances separate from the domestic dollar control accounts.

  • A 'Currency Code' and a 'Currency Type' (Domestic or Foreign) are assigned to each Bank record in AR02. If the Currency Type is 'Foreign', then the Currency Code is used to extract the exchange rate for the A/R from the Currency Table in Maintain Currency Table (CC22), which is used by the Invoicing system to convert foreign Sales into domestic Sales.

  • To recap: the Customer's Bank Code assignment triggers the foreign currency Invoicing.

  • Selling prices in their foreign currency are maintained in Maintain Price Lists (IM18) under a unique Price List and applicable Customers are linked to that Price List via SU13/Pricing.

What Happens in the Invoicing Cycle:

Selling prices assigned to the Order/Invoice are expressed in foreign currency. When the Invoice is printed, the currency description (maintained in AR02) is printed near the Invoice total as a visual clarification that the prices and Invoice total are in the Customer's currency. This is also true when recalling an Invoice from Invoice History for review in Display Invoices from History (IN45).

When a foreign currency Invoice passes through the Invoicing cycle, the following results occur:

  • Sales dollars and all other charges are converted into domestic dollars according to the exchange rate maintained in CC22.

  • For G/L purposes, Accounts Receivable is debited in foreign dollars. Sales and all other charges are credited in domestic dollars. The difference is a debit/credit to the Foreign Exchange account (from the Bank Record in AR02). This is reported on the Invoice Register (IN44).

  • Payments from this Customer will update the Foreign Currency Bank and Accounts Receivable and Exchange accounts, defined for the Bank Code assigned to the Customer (unless overridden in Maintain Payment Methods (IN08)).

  • The Customer's Account Inquiry, Aging Report and Statement of Account are expressed in foreign dollars.

  • The Overdue Analysis Report (AR83) and the Aging Report (AR84) both have an 'A/R Bank Code' restriction that can be used to print an aging by Bank, which supports the outstanding balance in the corresponding Foreign Currency Accounts Receivable control account in the G/L.

  • ALL Sales statistics are converted and reported in domestic dollars. Commission and Royalty programs use the domestic Sales amount in the calculation of Commission/Royalty.

Here is an example:

  • An Invoice for US$10,000.00 plus 150.00 freight @ 1.20% exchange produces an Invoice Register (IN44) that looks like this:
A/R Sales Other Chgs Exchange Cost GP%
10,150.00US 12,000.00 180.00 2,030.00 7,500.00 37.5*

  • *Gross Profit % is calculated based on domestic Sales: [12000 - 7500]/12000

  • For more information on Exchange Accounting for Account Receivable, click here.