Enter transactions in a foreign currency and apply payment in that same foreign currency or in AUD.
Cross-Currency transactions aren’t supported (where transaction and the payment are the same currency).
Multi-currency is not available on Recurring Sales and Recurring Purchases.
- System Administrators can go to Settings > Multi-currency and tick Turn on multi-currency for my file then Save.
- Once you have activated Multi-currency, this will initially show seven of the most-used currencies in Saasu, which are AUD, CAD, EUR, GBP, JPY, NZD and USD.
- If you want to enable other currencies tick Show all currencies.
Saasu like most modern accounting systems uses a dual account method for multi-currency accounts. When you create a foreign currency account Saasu creates an associated Exchange Account at the same time so that we can capture the foreign exchange differential back to your Saasu files base currency.
NOTE: All accounts including your foreign currency account and its associated exchange account are in your base currency. However your foreign currency account when viewed by itself represents your foreign currency account as though it is in that currency.
- You can add a bank account for USD currency. The main concept to note in Saasu is that ALL the accounts in the file are recorded in the base currency.
- You create a transaction in USD100.00.
- If the exchange rate for USD to AUD = 1.25 then you have AUD125.00 in value.
- Saasu books AUD25.00 to your exchange account and your USD bank account will display AUD100.00.
NOTE: If you are going to view this USA bank account in isolation then you can regard this as USD100.00 for information purposes only. To get the actual amount, add the USD account amount of AUD100 to the AUD25.00
You can use the General Ledger Detail report to look at the exchange account (in the above example for a purchase it would be the Liability: USD Accounts Payable Exchange account) to determine any unrealised foreign currency exchange amounts.
Foreign Currency Gain or Loss
Sometimes you might sell (or buy) products or services in a foreign currency that differs to your base currency (base currency is set when you select a zone for your Saasu file).
In such circumstances you may receive slightly more or less funds than invoiced because of exchange rate (FX) differences. For example, you receive AUD113 for a sale that was USD100, $13 being an exchange rate gain.
- Saasu will automatically set up the following accounts once your transaction is finalised (tax invoice):
- Income: Foreign Currency Gain – applicable to Sales
- Expense: Foreign Currency Loss – applicable to Purchases
- Speak to your accounting advisor to establish what you need for your particular circumstances. In some situations the Account might need to be updated to Expense: Foreign Currency Gain/Loss (example only)
- Apply a USD100 payment to the sale using the Asset: Foreign Bank Account’
- Make sure the invoice is now converted to a Tax Invoice
- To check that the gain/loss has been captured, run a report such as GL Detail to see the full transaction coverage
Foreign Currency Conversion Rate
When you book a Foreign Currency transaction in Saasu, you capture the FX conversion rate. However, if customers are paying you later, the FX rate can differ as time has passed and FX markets have moved.
- AUD $100 to Income: XYZ (Local currency transaction amount).
- USD $25 to Income: XYZ (FX conversion amount).
This allows us to control various reporting and display situations. It also enables accountants to isolate the FX conversion amount ($25) from the transaction amount ($100), among other things.
Later when a payment is applied to the transaction, the FX rate may differ to the initial one used on the transaction date. There are now two FX rates – One on the transaction date and one on the payment date. The difference between these rates is booked to the FX Gain or Loss account.
Quite often businesses repatriate money back to the home currency bank account from foreign currency bank accounts or the reverse and need to transfer money overseas. International money transfers can be entered into Saasu as a Journal as per the following example:
- From the main menu, select Add > Journal.
- Set the date to be the same as that on the bank statement or Money Transfer providers receipt.
- Enter a summary that explains the transaction.
- Select a your bank as contact if you want to track these types of transactions against your bank.
- Change the currency to be that of the Foreign Bank Account (USD in the pictured example).
- Enter a credit amount for the Bank Account the money is leaving. Make sure that the currency of the transaction and the currency of the account you’re crediting are the same.
- Enter a debit amount for the Bank Account the money is arriving in.
- Untick the currency xe.com automated rate feed check-box.
- Enter the rate the bank has provided manually (or wait and see what the exchange rate is on your bank statement).
- Add an extra line to the journal if you want to split out Bank Fees from the Currency Exchange amount.