multi-currency purchase orders

MTech has complete multi-currency functionality for purchases and sales. The currency is assigned to the cost center at the Division in Admin> Business> Definitions> General> Divisions. Default currencies are then assigned to the Vendor which will then default to the Products>Vendors tab which then transfers to the purchase order. The currency can be modified on the vendor sku or purchase order if required. If the currency defined in the purchase order is different than the divisional currency, the multi-currency is initiated. Optionally, the currency rate can be defined on the purchase order which modifies how the transactions are handled.

The process of creating a multi-currency  purchase order includes the same options as available in Create a Basic Purchase Order. To view any of the specific requirements, select any of the following links.

• Purchase Order Header
• Purchase Order Line Details
• Approve a Purchase Order
• Posting a Purchase Order
• View Purchase Order Inventory

Create a Multi-Currency Purchase Order

The following options are outlined in the Multi-Currency Purchase Order document:

• Purchase Order Requirements
• Creating a Receiving Transaction
• Creating a Multi-Currency Purchase Invoice

Purchase Order Requirements

1. Create a purchase order as outlined in Create a Basic Purchase Order.
   
   

 

2. Currency is selected in the purchase order line. It is possible to have different currencies for a product vendor and a transport vendor. Establishing the rate at the purchase order is optional however if defined on the purchase order, the rate will follow through to the purchase invoice as a fixed known rate.
3. Add-ons are defined in the child grid within PO Line No. If the add-on is paid to the product vendor, it assumes the currency of the product line. If they are paid to a different vendor, the currency can be set to a different vendor currency.
   
   

Create a Receiving Transaction

The process for receiving a multi-currency purchase order is the same as any other receiving process. The user is not required to enter any details related to currency.

1. Create a Receiving Transaction for any product type.
2. Currency flows to the receiving transaction as defined on the purchase order.
   
   
   
3. Save and close the receiving transaction.

4. Post the receiving transaction by selecting the transaction and right-click to select 'Post'.

 




5. The posting process will create a journal transaction to record the amounts for the receiving transaction. The journal transaction and the defined currency rates for the multi-currency transaction and difference go to a foreign exchange accrual account. If the rate is defined on the purchase order, the inventory will be valued at the pre-defined rate, otherwise the inventory will be valued based on the rate established in Exchange Rates for the effective date that is equal to or less than the product receive date.

Create a Multi-Currency Purchase Invoice

The process for creating an invoice that has multi-currency is the same as processing any other purchase invoice for a receiving transaction.

1. In General>Purchases>Invoices, select the drop-down menu on the and select PO Invoice.

2.  In the New PO Invoices box, enter the details, including the currency, related to the prepayment. This will filter only the receiving transactions for the vendor that were defined as the specified currency. Select OK to create the invoice.

Multi-Currency Purchase Order Header

The purchase invoice header contains the base data for the invoice, such as vendor, invoice number and invoice date. The purchase invoice header is divided into three sections within the header grid.

1. The Currency No indicates the currency of the transaction. The invoice will create a multi-currency journal is the invoice Currency No is different than the Divisional Currency No.
2. The logic is established for the exchange rate as follows:
1. Rate assigned to purchase order.
2. Rate assigned to invoice. This is done by selecting the Currency Rate Override and entering the Currency Exchange Rate in the invoice header.
3. Rate established in Exchange Rates based on the invoice date if a or b from above are not defined.

Purchase Invoice Line Details

The line details selected for the invoice will be filtered for only transactions for the selected vendor and currency. The details related to the invoice currency rate will be defined in the detail line item so that the user can view the invoice currency rate.

 Post Multi-Currency Invoice

Once the Multi-Currency Purchase Invoice has been created and saved, the invoice needs to be posted. The posting process locks the purchase invoice to prevent edits, and creates the journal transaction to record the liability. The Journal transaction reflects the difference between received rate and purchase order rate in the foreign exchange gain/loss account.