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Foreign currency partial payment posted against local currency invoice being revalued

  • 1.  Foreign currency partial payment posted against local currency invoice being revalued

    SILVER CONTRIBUTOR
    Posted Dec 11, 2020 11:34 AM
    Hi UG!

    My client is using AX2012 R3 CU8.

    They issued a FTI to a customer in CAD (the system accounting currency).

    The customer partially paid the invoice with a USD cheque.

    My client revalues GL accounts at month end and this USD transaction is being revalued, however, they expected that the CAD value should have been 'locked in' when the transaction was recorded.

    Has anyone else encountered this? Is this expected system behaviour? Any suggestions on how to prevent this transaction from revaluing?

    Thanks!

    ------------------------------
    Josh Bazin, CPA, CMA
    (they/them)
    Functional Analyst, NTT DATA
    Edmonton AB
    ------------------------------
    Digital Acceleration Binge Day.  January 28th 2021 | 11:00 AM - 2:00 PM EST


  • 2.  RE: Foreign currency partial payment posted against local currency invoice being revalued

    Posted Dec 14, 2020 08:03 AM
    Ho Josh,

    They need to settle the USD cheque payment against FTI issued at their transaction FX rate when posting a payment, leaving the invoice balance in CAD on the customer account.


    ------------------------------
    Maria Nowak
    Controller
    Tigercat International Inc.
    Cambridge ON
    ------------------------------

    Digital Acceleration Binge Day.  January 28th 2021 | 11:00 AM - 2:00 PM EST


  • 3.  RE: Foreign currency partial payment posted against local currency invoice being revalued

    SILVER CONTRIBUTOR
    Posted Dec 14, 2020 10:21 AM
    Hi Maria,

    Thanks for your response. To ensure I'm understanding, are you suggesting that the payment be recorded as CAD at the appropriate converted rate?

    ------------------------------
    Josh Bazin, CPA, CMA
    (they/them)
    Functional Analyst, NTT DATA
    Edmonton AB
    ------------------------------

    Digital Acceleration Binge Day.  January 28th 2021 | 11:00 AM - 2:00 PM EST


  • 4.  RE: Foreign currency partial payment posted against local currency invoice being revalued

    Posted Dec 14, 2020 10:32 AM
    Yes, correct. What's left is the partial unpaid balance in CAD. No revaluation required.
    If they pay again the rest of outstanding amount in USD currency, settle again against the partial FTI outstanding. Any small variances could be cleared to FX account.

    ------------------------------
    Maria Nowak
    Controller
    Tigercat International Inc.
    Cambridge ON
    ------------------------------

    Digital Acceleration Binge Day.  January 28th 2021 | 11:00 AM - 2:00 PM EST


  • 5.  RE: Foreign currency partial payment posted against local currency invoice being revalued

    TOP CONTRIBUTOR
    Posted Dec 14, 2020 05:24 PM
    Can you confirm the chain of events you are describing is as follows:

    1. FTI recorded in CAD
    2. check receipt recorded in USD and settled against the CAD invoice, partially settling it.
    3. user ran functionality of foreign currency revaluation in the GL module (GL > Periodic Tasks > Foreign Currency Revaluation).
    4. The customer observes, that although the USD payment is "closed"/"settled" it still gets revalued



    If this is indeed what happened than the root cause of your problem is that you are NOT supposed to be using the GL Fx Revaluation to revalue AR balances.
    There is an AR specific FrX revaluation functionality that needs to be run separately and used on open AR balances.

    There are several important reasons why using the GL revaluation for AR or AP balances is wrong, and one of the major reasons is that just like you are experiencing the GL process does not "recognize" closed balances, so it will continue to try to revalue full settled balances forever.

    If this is indeed the case there are several configuration steps you need to take in order to exclude AR/AP from the GL revaluation functionality ,and  turn on the AP/AR specific revaluation.

    ------------------------------
    Zvika Rimalt
    Functional Consultant
    Vancouver BC
    ------------------------------

    Digital Acceleration Binge Day.  January 28th 2021 | 11:00 AM - 2:00 PM EST


  • 6.  RE: Foreign currency partial payment posted against local currency invoice being revalued

    SILVER CONTRIBUTOR
    Posted Dec 14, 2020 06:28 PM
    That's exactly what they've done.

    Thank you Zvika, I thought it might have something to do with how they've been doing the revaluation. Thanks.

    ------------------------------
    Josh Bazin, CPA, CMA
    (they/them)
    Functional Analyst, NTT DATA
    Edmonton AB
    ------------------------------

    Digital Acceleration Binge Day.  January 28th 2021 | 11:00 AM - 2:00 PM EST


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