Payment Entry Calculations in Multi Currency Scenario

Hi all,

I need your help to understand multi currency scenario much better. When I have a PI raised in USD, and lets say my base currency is INR, and I have a USD bank account, should I care about the exchange rate at all? Because I am booking amount in USD and paying in USD.

Secondly if I should’t care about it then how do I do manual payment entries for multiple outstanding invoices with different currency exchange rates in them as then the unallocated amount is being calculated currently.

Thanks,
Palash

Yes you have to take care of exchange rate as your base currency is INR.

And you can make bulk payment of different rate invoice

You can create another bank account in your CoA with Currency USD and use this account in payment entries/JVs. You can also create new debtors/creditors accounts with currency USD as well:

https://docs.erpnext.com/docs/user/manual/en/accounts/multi-currency-accounting#11-set-currency-in-chart-of-accounts

Hey yes I am trying that but the problem is that if I have multiple outstanding invoices in one PE with different exchange rates than the current exchange rate then, if the paid amount is greater than the total amount to be paid, the unallocated amount which is being calculated is wrong. Let me tell you about an example.

Let say a PI was generated on 1/11/2020 at an exchange rate of 16 of 10000 USD and when I am doing the actual payment the exchange rate was 15 and if I pay 15000 USD in the payment entry, here the unallocated amount hsould be 5000 USD but it calculates to be 4333 USD. Even if the PI currency and Payment currency is same, due to this exchange rate difference unallocated amount is messed up.

I hope I am clear.

If a customer (or supplier) default currency is selected to be USD (co currency is INR) - how to show receivable or payable in USD? Is there a way to do this at the customer or supplier master level? It should display in the default currency for the party - it instead displays in the company currency. The accounting ledger for each allows you to select a currency but the accounts receivable or payable report does not…

I can understand that everything is based on company currency and since the exchange rate fluctuates, ERP shows the actual receivable or payable in terms of the company currency.

However @palashjhabak is right - the payable or receivable in USD terms has not changed and can easily be misunderstood. If the company maintains a USD account and does not intend to buy USD to make payments (or convert to INR for receipts) - then the customer / supplier master is misleading and may cause wrong payments.

So how to show the receivable or payable in the customer / supplier currency?

You can change the account at the invoice level or in the customer/supplier master as well:

I would suggest testing these scenarios prior to making changes directly on the production instance and see if they work out for you or not.

1 Like

Hi all,

I am still struggling to understand the basics of it and to decide whether the current implementation has a bug in the unallocated amount calculation.

Lets say I have been raised a PI in USD and I want to pay from a USD currency bank account. Now when I create a manual payment entry for this and suppose pay more than the actual PI amount, the unallocated amount which is calculated is wrong. And the reason this is happening is because unallocated amount is calculated by converting all the allocated amount to the base currency with exchange rate of PI and then converting it back to USD with exchange rate present in the Payment Entry itself.

e.g PI amount 5000 USD at a currency rate of 70 and PE has paid amount 10000 at a currency rate of 65, the unallocated amount now should be 5000 but its now (10000 - (5000 * 70 / 65 ) ) = 4615

Having the exact same challenge. Did you manage to resolve this issue?

Regards,
Tawanda

having the same problem. Also, the amount on the cancelled invoices are not floating on the unallocated amount. What have you guys did to solve this issues on the payment entry?