User wants to know where the difference in currency exchange rate between bill and bill payment posted to.
The impact of creating Bill under USD currency is that the amount entered in the Bill is the amount in USD. However, under Bill (View mode) > Actions > GL Impact, the amounts are converted to your Base Currency, AUD.
To pay the Bill, you can just follow the normal process:
- View the Bill > click Make Payment button
- Currency: select USD
- Account: Select the correct Bank Account to record the payment
- Make sure that the Accounts Payable account selected is similar with AP account used in Bill
- On the transaction list, select the Bill and enter Payment Amount
The difference in exchange rate on the Bill and Bill Payment will be recorded under Currency Revaluation Account. To illustrate:
Create standalone Bill (Transactions > Purchases > Enter Bill)
- Exchange Rate: 2
- Currency: EURO
- Transaction amount in EURO: 50
- GL Impact:
- Debit Inventory | $100 AUD
- Credit Accounts Payable | $100 AUD
Pay the Bill:
- Exchange Rate: 3
- GL Impact:
- Debit Accounts Payable | $150 AUD
- Credit Cash/Bank Account | $150 AUD
The difference of $10 AUD due to exchange rate variance is accounted for under Currency Revaluation.
- Debit Realized Gain/Loss | $50 AUD
- Credit Accounts Payable | $50 AUD
- Basically, the Currency Revaluation will record loss of $50 because you only recorded $100 as payable when you record the Bill. However, when you paid the Bill, you paid and additional $50 due to exchange rate fluctuation.
- The $50 dollar credit or increase in Accounts Payable is recorded because it should have been $150 liability instead of $100 (which was only recorded in Bill).
Currency revaluation is a system-generated transaction that records the impact to base currency valuation due to exchange rate fluctuations. For more information, see Currency Revaluation Transactions in Help Center.