Payment and Allocation with Different Currency Type
- Tanpreet Singh (Unlicensed)
- Ashwani Thakur
Overview
When a payment creates for an invoice, it automatically creates view allocations against the invoice schedule. However, if user creates a payment record independently, multiple invoices can be allocated against that Payment using the Payment Allocation Screen.
An Enhancement has been done in Payment Allocation form where user can allocate an invoice of one currency type with the Payment of another currency type.
Payment Allocation Form
To open the Payment Allocation form, navigate to Menu> Financial Management> Bank Management> Payment Allocation Form
or search for Payment Allocation Form in search utility available in the menu itself.
Below is the screenshot of Payment Allocation Form.
A new Parameter has been added with the name of ''Currency Type'‘, it will only get displayed while doing multi-Currency allocation. System filters the Payments as per the Currency Type and Conversion Date. User can only select those Payments, which has the same Currency Type and Conversion Type. If user tries to select Payment of different currency conversion type, system shows the info message ''Please Select Payment same as Currency Type and Conversion date''.
System always convert the Invoice as per the conversion rate and Currency type. (In case allocating Invoice to Payment Multi-Currency or Invoice to Invoice).
This feature helps the user to allocate different Currency Types for Invoice with Payments and Invoice with Invoice.
Below are the cases defined in details to achieve Gain and Loss on Allocation. In all the cases, we are assuming our Accounting Book is in USD.
Currency Conversion as per Currency Type mentioned below.
Currency | Currency To | Currency Type | From 01.04.2022 To 15.04.2022 |
|
USD | INR | Spot | 73.33 | 0.013636983 |
|
|
|
|
|
USD | INR | Bank Rate | 75.33 | 0.013274924 |
|
|
|
|
|
Payment to Invoice (Base Currency: USD)
If the Payment is made before the Invoice [I.e. Prepayment]
Case 1.1: Invoice and Payment are both in INR
Create an AP Payment-1000000 in INR for Rs.7533 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Payment Selection | 100.00 |
|
Checking in Transfer |
| 100.00 |
Create an AP Invoice-1000069 in INR for Rs.7533 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 102.72 |
|
Account Payable Trade |
| 102.72 |
On Payment Allocation:
Allocation Posting:
Particulars | Debit | Credit |
Account Payable Trade | 102.73 |
|
Payment Selection |
| 102.73 |
Gain and Loss |
| 2.73 |
Payment Selection | 2.73 |
|
Note:
System will calculate the Gain and Loss in base Currency.
At the time of Allocating Invoice and Payment with same currency, then allocation will also happened in the same currency.
Case 1.2: Invoice and Payment are both in USD
Create an AP Payment in USD for $100 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Payment Selection | 100 |
|
Checking in Transfer |
| 100 |
Create an AP Invoice in USD for $100 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100 |
|
Account Payable Trade |
| 100 |
On Payment Allocation:
Allocation- 1000001
Particulars | Debit | Credit |
Account Payable Trade | 100.00 | 0.00 |
Payment Selection | 0.00 | 100.00 |
Gain and Loss | 00 | 0 |
Accounts Payable | 0 | 0 |
Note:
System will not Calculate gain and loss.
At the time of Allocating Invoice and Payment with same currency, then allocation will also happened in the same currency.
Case 1.3: Payment is in USD and Invoice is in INR
Create an AP Payment-1000005 in USD for $100 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Payment Selection | 100 |
|
Checking in Transfer |
| 100 |
Create an AP Invoice-1000005 in INR for Rs.7333 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100 |
|
Account Payable Trade |
| 100 |
On Payment Allocation:
Note:
At this time, system will only allocate when Payment Applied amount is change to -97.35.
-2.65 Payment will remain open.
Case 1.3.1 : Payment is in USD and Invoice is in INR
Create an AP Payment-1000029 in USD for $100 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Payment Selection | 100.00 |
|
Checking in Transfer |
| 100.00 |
Create an AP Invoice-1000070 in INR for Rs.7533 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 102.73 |
|
Account Payable Trade |
| 102.73 |
On Payment Allocation
Allocation: 1000002
Particulars | Debit | Credit |
Account Payable Trade | 100.00 | 0.00 |
Payment Selection | 0.00 | 100.00 |
Gain and Loss | 00 | 2.73 |
Accounts Payable | 2.73 | 0.00 |
Note:
At this time, system will convert the Invoice amount to USD, Currency Type-Bank Rate with Conversion date-10/04/2022.
2.73= (7533/73.33) -(7533/75.33), System will Calculate the gain and loss.
Case 1.4: Payment is in INR and Invoice is in USD
Create an AP Payment- in INR for Rs.7533 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Payment Selection | 100 |
|
Checking in Transfer |
| 100 |
Create an AP Invoice in USD for $100 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100 |
|
Account Payable Trade |
| 100 |
On Payment Allocation
Allocation: 10XXXXX3
Particulars | Debit | Credit |
Account Payable Trade | 100.00 | 0.00 |
Payment Selection | 0.00 | 100.00 |
Gain and Loss | 00 | 2.73 |
Accounts Payable | 2.73 | 0 |
Note:
At this time, system will convert the Invoice amount to INR, Currency Type-Bank Rate with Conversion date-10/04/2022.
2.73= (7533/73.33) -(7533/75.33), System will Calculate the gain and loss.
When Payment is done after Invoice
Case 2.1: Payment and Invoice are both in INR
Create an AP Invoice in INR for Rs.7533 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100 |
|
Account Payable Trade |
| 100 |
Create an AP Payment in INR for Rs.7533 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Payment Selection | 102.73 |
|
Checking in Transfer |
| 102.73 |
On Payment Allocation
Allocation: 10XXXXX6
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Payment Selection |
| 100.00 |
Gain and Loss | 2.73 |
|
Payment Selection |
| 2.73 |
Note:
At this time, system will convert the Invoice amount to INR, Currency Type-Bank Rate with Conversion date-10/04/2022.
2.73= (7533/73.33) -(7533/75.33), System will Calculate the gain and loss in base currency.
Case 2.2: Payment and Invoice are both in USD
Create an AP Invoice in USD for $100 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100 |
|
Account Payable Trade |
| 100 |
Create an AP Payment in USD for $100 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Payment Selection | 100 |
|
Checking in Transfer |
| 100 |
On Payment Allocation
Allocation:100XXX7
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Payment Selection |
| 100.00 |
Gain and Loss | 0.00 |
|
Payment Selection |
| 0.00 |
Note:
When Invoice and Payment has same currency then allocation will done in same currency.
No Currency Gain & Loss will calculate.
Case 2.3: Invoice is in USD and Payment is in INR
Create an AP Invoice in USD for $100 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100 |
|
Account Payable Trade |
| 100 |
Create an AP Payment in INR for Rs.7333 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Payment Selection | 100 |
|
Checking in Transfer |
| 100 |
On Payment Allocation
Allocation:100XXXX8
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Payment Selection |
| 100.00 |
Gain and Loss | 2.65 |
|
Payment Selection |
| 2.65 |
Note:
At this time, system will convert the Invoice amount to INR, Currency Type-Spot with Conversion date-15/04/2022.
2.65= (7333/73.33) -(7333/75.33), System will Calculate the gain and loss.
Case 2.4: Invoice is in INR and Payment is in USD
Create an AP Invoice in INR for Rs.7333 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 97.35 |
|
Account Payable Trade |
| 97.35 |
Create an AP Payment in USD for $100 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Payment Selection | 100 |
|
Checking in Transfer |
| 100 |
On Payment Allocation
Allocation:100XXXX8
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Payment Selection |
| 100.00 |
Gain and Loss | 2.65 |
|
Payment Selection |
| 2.65 |
Note:
At this time, system will convert the Invoice amount to USD, Currency Type-Spot with Conversion date-15/04/2022.
2.65= (7333/73.33) -(7333/75.33), System will Calculate the gain and loss.
Invoice to Invoice (Base Currency: USD)
3.1 When AP Invoice is created before AP Credit Memo.
Case 3.1.1: AP Invoice and AP Credit Memo are both in INR
Create an AP Invoice in INR for Rs.7533 with currency type as Bank Rate on 10.04.2022.
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100 |
|
Account Payable Trade |
| 100 |
Create an AP Credit Memo in INR for Rs.7533 with currency type as Spot Rate on 15.04.2022.
Posting:
Particulars | Debit | Credit |
Account Payable Trade | 100 |
|
Product Inventory Clearing |
| 100 |
On Payment Allocation:
Allocation: 10XXXX11
Particulars | Debit | Credit |
Account Payable Trade | 102.73 |
|
Account Payable Trade |
| 102.73 |
Gain and Loss | 2.73 |
|
Account Payable Trade |
| 2.73 |
Note:
At this time, system will convert the Invoice amount to INR, Currency Type-Spot with Conversion date-15/04/2022.
System will Set Currency Rate Type of AP credit memo as it has Highest Account date present.
2.73= (7533/73.33) -(7533/75.33), System will Calculate the gain and loss.
Case 3.1.2: AP Invoice and AP Credit Memo are both in USD
Create an AP Invoice in USD for $100 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100 |
|
Account Payable Trade |
| 100 |
Create an AP Credit Memo in USD for $100 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Account Payable Trade | 100 |
|
Product Inventory Clearing |
| 100 |
On Payment Allocation:
Allocation:10XXXX12
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Account Payable Trade |
| 100.00 |
Gain and Loss | 0.00 |
|
Payment Selection |
| 0.00 |
Note:
System will Set Currency Rate Type of AP credit memo as it has Highest Account date present.
No Gain and loss will calculate in this case.
Case 3.1.3: AP Invoice is in INR and AP Credit Memo is in USD
Create an AP Invoice INR 7333.00 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 97.35 |
|
Account Payable Trade |
| 97.35 |
Create an AP Credit Memo in USD for Rs.100 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Account Payable Trade | 100 |
|
Product Inventory Clearing |
| 100 |
On Payment Allocation
Allocation:100XXXX16
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Account Payable Trade |
| 100.00 |
Gain and Loss | 2.73 |
|
Payment Selection |
| 2.73 |
Note:
At this time, system will convert the Invoice amount to USD, Currency Type-Spot with Conversion date-15/04/2022.
On Allocating with AP Invoice with AP Credit Memo in Multi-Currency, Allocation should be done in Currency which has the highest account date.
System will Set Currency Rate Type of AP credit memo as it has Highest Account date present.
2.73= (7533/73.33) -(7533/75.33), System will Calculate the gain and loss.
Case 3.1.4: AP Invoice is in USD and AP Credit Memo is in INR
Create an AP Invoice in USD for Rs.100.00 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100 |
|
Account Payable Trade |
| 100 |
Create an AP Credit Memo in INR for 7333.00 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Account Payable Trade | 100 |
|
Product Inventory Clearing |
| 100 |
On Payment Allocation
Allocation:100XXXX66
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Account Payable Trade |
| 100.00 |
Gain and Loss | 2.65 |
|
Account Payable Trade |
| 2.65 |
Note:
At this time, system will convert the Invoice amount to INR, Currency Type-Spot with Conversion date-15/04/2022.
On Allocating with AP Invoice with AP Credit Memo in Multi-Currency, Allocation should be done in Currency which has the highest account date.
System will Set Currency Rate Type of AP credit memo as it has Highest Account date present.
2.65= (7333/73.33) -(7333/75.33), System will Calculate the gain and loss
3.2 When AP Invoice is created before AP Credit Memo.
Case 3.2.1: AP Invoice and AP Credit Memo are both in INR
Create an AP Credit Memo in INR for Rs.7533 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Product Inventory Clearing |
| 100.00 |
Create an AP Invoice in INR for Rs.7533 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 102.73 |
|
Account Payable Trade |
| 102.73 |
On Payment Allocation
Allocation:100XXX67
Particulars | Debit | Credit |
Account Payable Trade | 102.73 |
|
Account Payable Trade |
| 102.73 |
Gain and Loss |
| 2.73 |
Account Payable Trade | 2.73 |
|
Note:
On Allocating Invoice with AP Credit Memo which has same Currency INR then Allocation will also done in INR.
On Allocation, Currency Rate Type will be set as same as AP Invoice.
2.73= (7533/73.33) -(7533/75.33), System will Calculate the gain and loss
Case 3.2.2: AP Invoice and AP Credit Memo are both in USD
Create an AP Credit Memo in USD for $100 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Product Inventory Clearing |
| 100.00 |
Create an AP Invoice in USD for $100 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100.00 |
|
Account Payable Trade |
| 100.00 |
On Payment Allocation
Allocation:100XXX68
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Account Payable Trade |
| 100.00 |
Gain and Loss |
| |
Account Payable Trade |
|
Note:
On Allocating Invoice with AP Credit Memo which has same Currency USD then Allocation will also done in USD.
On Allocation, Currency Rate Type will be set as same as AP Invoice.
There will be no Currency gain & loss.
Case 3.2.3: AP Invoice is in INR and AP Credit Memo is in USD
Create an AP Credit Memo in USD for $100 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Product Inventory Clearing |
| 100 |
Create an AP Invoice in INR for Rs.7333 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100.00 |
|
Account Payable Trade |
| 100.00 |
On Payment Allocation
Allocation:100XXX69
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Account Payable Trade |
| 100.00 |
Gain and Loss |
| 2.65 |
Account Payable Trade | 2.65 |
|
Note:
On Allocating Invoice in INR with AP Credit Memo in USD, Allocating in INR with Currency Type-Spot and with Conversion date-15/04/2022.
2.65= (7333/73.33) -(7333/75.33), System will Calculate the gain and loss.
Case 3.2.4: AP Invoice is in USD and AP Credit Memo is in INR
Create an AP Credit Memo in INR for Rs 7533.00 with currency type as Bank Rate on 10.04.2022
Posting:
Particulars | Debit | Credit |
Account Payable Trade | 100.00 |
|
Product Inventory Clearing |
| 100.00 |
Create an AP Invoice in USD for $100 with currency type as Spot Rate on 15.04.2022
Posting:
Particulars | Debit | Credit |
Product Inventory Clearing | 100.00 |
|
Account Payable Trade |
| 100.00 |
On Payment Allocation
Note:
In this case to do the Allocation, AP Credit Memo, Applied amount must equals to AP Invoice Applied amount.(Over/Under, Discount and Write-Off).
Note:
On Allocation line, Amount will set as 100.00 in USD with Currency Type-Spot
2.65= (7333/73.33) -(7333/75.33), Calculate the gain.
2.73 AP Credit Memo will remain open, user can set-off this by Gl Journal.