Re: How to handle payments with exchange loss?

Hi Mikkel,

On Wed, Jan 22, 2014 at 8:06 PM, Mikkel Høgh <..hidden..> wrote:

Hi LSMB,

I have a thorny issue I can't figure out how to handle correctly with
LSMB.

I am based in Switzerland, and I thus I do business in CHF. I have
customers in Denmark, which I invoice in DKK. When I make the invoice, I
specify the exchange rate, and LSMB calculates the corresponding amount
in CHF via the exchange rate on my debitor account. However, when I
receive payment, the exchange rate the bank gives me is slightly
different.

Normally, I'd use Cash -> Receipt to record it, but I can't figure out
how. Should I select CHF or DKK when making the receipt (my bank account
is in CHF, so the received amount is as well), and how can I
debit/credit the difference to my exchange win/loss accounts?

Well, normally, that would indeed be the process. You specify the payment in the same currency as you specify the invoice. (In your case, this means calculating the rate to get exactly the right CHF amount.)

The resulting CHF amounts are not the same on the invoice and the payment. This is normal. If the CHF amount paid is less than invoiced, the difference is automatically posted on the Foreign Currency Exchange rate Loss account; if it's more than invoiced, it's posted on the FX Gain account. In 1.3, you have to select the FX Gain and FX Loss accounts in the System->Default screen.

Alternatively, I could make a GL transaction, crediting the original
amount to the debitor account, and splitting the debit amongst the bank
account and the exchange win acct (I mostly have gains, since I
specified a conservative rate in the first place).

Or something completely different? Any suggestions?

Well, you could run a test posting to verify the process I pointed out above, but this is what I verified that should be there (as I fixed it myself early in the 1.3 release cycle :-).

--
Kind regards,

Mikkel Høgh <..hidden..>

Hope it still works! :-)

Bye,

Erik.

http://efficito.com -- Hosted accounting and ERP.

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