AR in different currency

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1

Hello,

I had a question about using different currencies. We use USD as our primary currency. We invoiced a customer in EUR, they made a wire transfer in EUR, and it was received and converted by our bank to USD when it was deposited.

When I look at the deposit, Cetec entered in the amount based on the exchange rate for the given day (not what our bank used). How do I properly receive this payment to reflect the actual amount of $$ that were deposited?

Thanks!

2

@vikas

Could you provide a link to the invoice and the payment? I can look into this more to find the right process that will work for you.

Thanks,

Cetec ERP Support

3

@cetecerp23

Here’s the invoice
Here’s the payment

As I had mentioned:

  • the invoice was in EUR
  • the payment was effectively received in USD (automatically converted by our bank at some exchange rate).
  • the exchange rate my bank used does not match the one in CETEC.
4

@vikas

Thank you for providing these details! Could you provide what the USD amount that you received as a payment was? This will help me give you the best steps to be sure everything is recorded correctly.

Thanks,

Cetec ERP Support

5

Hi @cetecerp23

Given this is a public forum, lets assume for sake of argument it was off by a few hundred dollars. Where/how do I offset this?

I’m guessing I need to figure out the exchange rate that CETEC is using for that day and then put in the difference (in EUR) as a writeoff to some bank fees or discount account? Hopefully there is an easier way to do this…

6

@vikas

Apologies for the delay here. I am going to discuss this with our accounting team for best practices and get back to you.

Thanks,

Cetec ERP Support

7

@vikas

I discussed this with the accounting team and here is what they suggested for best practices.

The Invoice date is 2024-12-05. The Cetec ERP Currency Rate table for EUR to USD rate this date was 1.053019: https://photonspot.cetecerp.com/tablemaint/CurrencyRate/edit

The ARPayment date is 2025-01-27 and the EUR to USD rate this date was 1.04683

Even though the bank deposited USD, the invoice is in EUR so the ARPayment must be made in EUR (the amount of the Invoice)

First verify the rate date that the bank used when they converted EUR to USD and set that as the Post On date for the ARPayment, if different than 2025-01-27.

Once the ARPayment is complete, ledger entry splits will be created in USD with the currency delta between the invoice date and payment date.
DR Bank Account
CR Accounts Receivable
DR (if loss) or CR (if gain) Foreign Currency Gain/Loss
CR (if loss) or DR (if gain) Accounts Receivable

To record the bank fees:

  1. Click the Ledger link in the left side nav of the payment.
  2. Click the Entry # to go to the entry edit.
  3. Reduce the amount debited or credited to the Foreign Currency Gain/Loss account by the amount of the bank fees.
  4. Click the blue +Split button, input the account number for Bank Fees and input the debit amount of the bank fees.
  5. Click the red Update Entry button.

Please let me know if you have more questions.

Thanks,

Cetec ERP Support

8

This makes sense. Thanks a lot for your help!