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Entering a Foreign Currency Transaction

Foreign currency transactions are entered in the same manner as other transactions. The key point to note is that the transaction currency is determined by:

  • The currency of the debtor/creditor for an invoice, or a payment on invoice;
  • The currency of the bank account for a receipt/payment.

Note that all values on the transaction are considered to be in that currency. Thus an invoice for 100 units of currency made out to a US customer is considered to be USD 100, whereas an invoice for 100 units of currency made out to a Canadian customer is considered to be CAN 100. The transaction currency (and rate) is shown on the Exchange Rate button in the top right of the transaction.

The Transaction Exchange Rate

By default, the exchange rate of a currency is determined by the rate for the period into which it is posted, and the rate is set when the transaction is posted. Thus if a transaction is entered when the exchange rate is x, and is posted after the rate has been reset to y, the transaction will have an exchange rate of y.

The current exchange rate is displayed on the Exchange Rate button on the top right of the transaction. The converted rate of the transaction in local currency is displayed beneath this.

To lock an exchange rate into a transaction:

  1. Click the Exchange Rate button

The transaction Currency Rate window will open

  1. Turn off the Use system rate at posting time option
  1. Enter the desired transaction rate into the rate field
  1. Click OK

Note:  A transaction that, at the time of posting, has a different transaction rate to the system rate will result in the recording of a realised or unrealised currency gain or loss. This is done by adding additional lines to the transaction, which you can see if you print the transaction using the Print Details toolbar button.

Note: You cannot specify the transaction rate for the payment or receipt of an invoice.

You can restore the system rate by opening the window and setting the Use system rate at posting time option.

Warning: When you post a backdated multi-currency transaction, MoneyWorks will check for exchange rate changes in subsequent periods. For each such rate change a journal will be created to account for any realised or unrealised gains/losses on the new transaction. To minimise this, try to avoid entering historic foreign currency transactions.