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Mutli Currency

 
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Justme



Joined: 06 Apr 2008
Posts: 14
Location: AU

PostPosted: Thu Apr 17, 2008 5:08 pm    Post subject: Mutli Currency Reply with quote

Hi,
We are going to be dealing in 4 different currencies in our company. I have read through the chapters regarding muti currency and have set up MYOB to cater for multi currency and have established an A/P multi currency account and A/R multi currency account with associated exchange rate for each currency that I have set up.

My question now is :

Do I need to set up a seperate expense account to track each currency payment? For example, if one director is travelling and paying mainly in US $ do I need to track all his his expenses in US $ and therefore set up an US $ expense account for him? If this is correct how do I do the converion in Aust $.

Likewise, we have a contractor who will be paid in US $'s. He is not an employee. How do I set him up?

Is there anywhere in your book that expands on this.

Thanks
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marc



Joined: 19 Nov 2005
Posts: 175
Location: Whyalla SA

PostPosted: Thu Apr 17, 2008 9:09 pm    Post subject: Reply with quote

Hello again,

I am not really sure what country you are in or what currencies you are dealing with but i am in Australia so my answer is based on that.

There is a concept of what is your reporting currency.ie in what currency do you keep the books, report records to your tax authority and report to your company managment, owners and directors. In australia it is usually australian dollars but large australian companies often use $USD as that is what most of their contracts are written in.

So you decide your reporting currency and all your other currency transactions are converted into the reporting currency which can vary from day to day. As a rule, expenses convert at the rate prevelant on the day of the transaction and the assets, liabilities and equity of the balance sheets are translated using end of month figures supplied by foreign exchange (FX) authorities ( i think thats how it works)

Any differences that arise on gains or losses in foreign currency translations from the financial records become expenses or losses and are taken as income or lossses in the income statement directly to equity and not through the P&L statement (which was the old way).

If the director stays in a hotel on the 15th and pays in $USD, then convert this amount to your reporting currency and make that the entry into myob for the 15th. If s/he buys a car on behalf of the company as an asset and it stays in the US, the transaction is recorded on the day of sale but its value is re translated for the balance sheet at the end of every month.

The US contractor is paid in their $USD but the amount entered in myob is that amount translated to reporting currency at a rate applicable on the day of the transaction. Watch for bank and foreign transaction costs. Set him up as you would any other expense.

I would seriously double check all this with your accountant or hope someone else here comments but hope this helps.


Marc
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chinamonty



Joined: 18 Jan 2006
Posts: 137
Location: Ex Shenzhen China Now Melbourne

PostPosted: Fri Apr 18, 2008 6:27 pm    Post subject: Reply with quote

Treat them as bank accounts - they are really no different to petty cash.
Set up one for each director in the currency of their card. When you do a spend money against the "bank account" you just use your expense account and the system will convert the foreign currency to the native currency. The system allows you to have an overall currency conversion rate but you can change it for individual transactions easilly enough when you chose the currency in spend money it will shoe the current rate to your native currency. You will find working with foreign currency a bit strange as the exchange account does not show you the exchange figure -it shows the difference. If for instance you have USD1000 and your currncy is 7 to 1 to the USD (like Hong Kong for instance. the USD account will show 1000 but the exchange account will show 7*1000-1000 as the figure ie HKD6000. It seems strange to me but it does work (or at least the HK version works this way.
One of the shortcomings in foreign curreny is when you are exchanging two foreign currencies. You have to use a "contra account". We keep our books in HKD but sometimes we change USD to CNY. To do this in the system we have to change from USD to HKD then HKD to CNY. You have to be careful when you do this and keep written notes while you are doing it in case you get disturbed whilst you are doind it.
I hope this helps but if you need more definitive answers please just ask.
Have a play in the test system first -thats how I had to learn.
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Justme



Joined: 06 Apr 2008
Posts: 14
Location: AU

PostPosted: Sun Apr 20, 2008 2:36 pm    Post subject: Reply with quote

Hi
Thanks for your responses. I am in Australia, and have spent the day reading both of Veechi's books but still a bit lost as to how to cater for multi currencies when it comes to expenses and billing our customers.

I have set up an Account Receivable and Accounts Payable account for each currency and attached an exchange rate to this account in the Account list command centre.

My confusion rests with where do I set up the expenses and billings for the foreign currencies. eg Do I create a expense account for each currency in the account list section or can I simply create a card file for each expense account in each currency. eg.. a card file for travel in US$, and one in Can $ etc.

Thanks
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chinamonty



Joined: 18 Jan 2006
Posts: 137
Location: Ex Shenzhen China Now Melbourne

PostPosted: Mon Apr 21, 2008 12:17 pm    Post subject: Reply with quote

A question I have just tought of though is do you have your bank account in foreign currency. We have one bank account (not in myob -at the bank) but we hold various currencies as this is the easiest way to do it.
Assuming that you do hold bank accounts in overseas currencies -
When you set up your card for each customer/supplier you need to record the currency you deal with them in then when you raise an invoice it will automatically be in the correct currency. When you spend money in the foreign currency and you record it to an expense account the system will automatically convert it to your native currency ie AUD. You dont have seperate expense accounts for each currency you only have currency specific accounts for bank, debtors and creditors.
If oyu are trying to collect the expenses for billing purposes then perhaps you should be using Job numbers as a way to keep track of specific expenses.
If you dont have bank accounts in overseas currencies then may be you should investigate the pros and cons of changing. I guess a lot depend in whether you just receive USD or whether you spend them as well (we do)
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Justme



Joined: 06 Apr 2008
Posts: 14
Location: AU

PostPosted: Mon Apr 21, 2008 1:03 pm    Post subject: Reply with quote

Hi
Thanks for the response. It seems really hard to get around this multicurrency. We only have one other foreign currency bank account and that is in Euro's. We do not have foreign bank account for the remaining 3 foreign currencies.

What I have done is as follows:

1. Set up a foreign accounts receivable account and accounts payable account for each foreign currency in the account list which has automatically attached an exchange rate to it, and then gone into the List Menu and selected the currency and selected the asset account for tracking receivables, and the liablity account for tracking payables for each currency. Is this correct?

2. Can I do this and still have an Australian bank account even though we are tracking the payables and receivables in a different currency?

3. I am assuming that all I need to do after this is set up a card file for each supplier/customer and select the appropriate currency.

Thanks for your help. This multicurrency takes some getting used to

Very Happy
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chinamonty



Joined: 18 Jan 2006
Posts: 137
Location: Ex Shenzhen China Now Melbourne

PostPosted: Mon Apr 21, 2008 1:39 pm    Post subject: Reply with quote

Does MYOB Australia run a course specifically covering Multi Currency. They do in Hong Kong as it is so common for businesses to deal in HKD and USD.
I found it hard to understand multi-currency at first but it fell in to place fairly quickly once I started using the test company to run scenarios through.
Unfortunately the Help provided with the product is only general regarding multi-currency (and I can understand that as we all handle things differently) so just perservere and of course ask here and we will see if we can assist.
It should not make a huge difference with not having the seperate bank accounts thoug but you will find you may have to do lots of adjustments as the excahnge rate actually used can alter from that showing online. This happens to me with Euro transactions (we rarely deal in Euro0 which we pay using our USD account. I find I have to do adjustments when I am doing the bank reconciliation however if you are doing a lot of trancations this way you may find a better way to keep on top of it.
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Justme



Joined: 06 Apr 2008
Posts: 14
Location: AU

PostPosted: Mon Apr 21, 2008 2:53 pm    Post subject: Reply with quote

Hi,
thanks for your response. I don't think MYOB offer courses specifically in multi currency. I am hoping what I have done in my set up in correct, is that how you did it?

I think there is a way that you could change the exchange rate every day that would prevent you from having the exchange rate problems you mention below when doing your bank reconciliation, or does this still cause problems with your bank reconciliation What version are you using?

Sorry I am very new to multi currency.
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chinamonty



Joined: 18 Jan 2006
Posts: 137
Location: Ex Shenzhen China Now Melbourne

PostPosted: Mon Apr 28, 2008 1:07 pm    Post subject: Reply with quote

My problem is just because of how the Internet banking system works -the problem is not with MYOB. It is a simple thing to fix up when you do your bank rec but when you first see the problem it does not look that easy to fix. Of course it means your theoretical balances are out by a small amount (aren't they always anyway due to fees).
We use the Hong Kong version 10 premier and I am about to upgrade to 12 but the upgrade doesnt give me any significant advances and doesnt fix one of my problems (which I told them about in 2006)
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inchi



Joined: 09 Feb 2009
Posts: 6
Location: Melbourne

PostPosted: Tue Feb 10, 2009 10:50 am    Post subject: Multicurrency and Myob documentation Reply with quote

Hi, I'm new to MYOB however I have managed to perform ( and understand) most tasks required for recording transactions for a small business.

I didn't install the software and believe the package that I'm using is Accounting Plus V15. I really haven't had much time to read up on the documentation supplied with the software and have used it as a quick reference to solve some issues. At other times I have had some success qureying the web for solutions

My business is starting to trade in $US and I'm struggling to find step by step instructions on how to establish in MYOB. I will only have 1 Debtor and 1 Creditor in different countries; I don't see this being a problem.

From viewing posts on this subject I think I understand that the Card File for the supplier, customer and bank account will control the currency

The chief wants to use separate accounts for the expenses/income than those used for the main core of business for $AUD. I do not envisage a large volume of transactions.

I would be grateful for some assistance in the following areas

1. what are the required accounts? do I need additional Debtors and Creditor trading accounts? Where can I get documentation for the Process to establish.

2. I want to be able to report in AUD for the P/L

3. What is the process/transactions required to report the Balance Sheet and Cash Flow reports at say EOM Qtrly EOY etc

I would like to see some type of flow documentation that details the whole process for multicurrency processing

Sorry about the length of the question

Thanks in advance
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Lynne



Joined: 23 Sep 2008
Posts: 237
Location: Brisbane

PostPosted: Tue Feb 10, 2009 10:18 pm    Post subject: Reply with quote

Have you checked the MYOB Support Notes on Multicurrency?
Lynne
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inchi



Joined: 09 Feb 2009
Posts: 6
Location: Melbourne

PostPosted: Wed Feb 11, 2009 10:09 am    Post subject: Reply with quote

Quote:


Hi Lynne, Thank you for the response. I have checked MYOB support notes (after I posted the reply) and there it was. I believe that I need the premier version, the support notes provide excellent detail for multicurrency.

I do not believe that AccountPlus V15 ( or any other version) supports multicurrency, I will do some more research

Thanks again
Greg Laughing
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