1. Enter foreign currency transactions for the first time
3. Enter foreign currency transactions at the new rate
(For worked examples of multi-currency transactions, see Multi-currency examples)
1. Enter foreign currency transactions for the first time
1.Select Set Up > Currencies, Departments and Lists > Currencies > New.
2.Enter the name of the currency, the abbreviation and rate to the base currency, then click OK:
3.Click on No ledgers are currently analysed by the above list. Change...
4.Tick the ledgers that you want to be analysed by currency and click OK. The ledgers that are ticked in the screenshot below are those that can be analysed by currency, which are monetary assets and liabilities.
| Typically, you might analyse the stock, bank, customer and supplier ledgers by currency. You should not analyse a ledger by currency unnecessarily, as you will then have to select a currency when you first use an account. |
1.2. Create any foreign currency customers/suppliers
Select Set up > Accounts > Customers/Suppliers > New and enter the required details.
The foreign currency is assigned to a customer/supplier when you enter the first transaction to their account. This is done by selecting the currency from the currency drop-down in the transaction entry screen.
1.3. Create any foreign currency bank accounts
Select Set up > Accounts > Bank > New and enter the required details.
The foreign currency is assigned to the bank account when you enter the first transaction to that account. This is done by selecting the currency from the currency drop-down in the transaction entry screen.
1.4. Enter a foreign currency transaction
1.Check that the current exchange rate is the one that want to use. To view the current rate, select Set up > Currencies, Departments and Lists > Currencies.
2.Enter transaction in the normal way (see Transaction entry methods), but select the currency from the currency drop-down in the transaction entry screen:
If the currency drop-down does not appear, make sure you have completed all the steps above.
After selecting the foreign currency the first time you enter a transaction to a foreign currency account, the currency will default to this currency when entering transactions to th account thereafter, and cannot be changed.
If you are creating a sales invoice using the SIN transaction, the currency is not selected in the transaction entry screen. Instead, it is selected when you set up the product or service for the invoice:
The transaction is recorded in the accounts in the base currency translated from the foreign currency amount at the current exchange rate set in 1.1. Set the exchange rate.
For example, an invoice for 1,000 Euro (€) entered when the exchange rate is set at €1.12 to £1, is recorded in the accounts at £892.86 (1000 / 1.12). Entries to income and expenditure accounts, VAT accounts, and non-monetary asset/liability accounts (e.g. fixed assets), remain translated to £ at the rate when the transaction was entered and do not change when a currency is revalued. This satisfies accounting requirement c).
Accounting requirement d) is satisfied as explained in Exchange differences on payments of invoices.
Note that foreign currency transactions cannot be entered using the P+R transaction or the Universal Input Sheet.
Update the exchange rate as often as is needed to meet accounting requirement a). If you choose to use an average rate for the month, it is advisable to enter this rate with a date at the beginning of the month before you enter any transactions for that month. In VT Transaction+, the currency revaluation function is used to both update the exchange rate and revalue monetary assets and liabilities at year-end.
1.Ensure you have entered all transactions that need to be entered at the old rate before updating to the new rate.
2.Select Display > Currency revaluations > New currency revaluation.
3.Select the currency, enter the date and the new rate.
For example, to change the rate for February 2024 to €1.13:
Currency revaluations should be done in order of date.
If you require further details of how the currency revaluation function works, see Currency revaluation.
3. Enter foreign currency transactions at the new rate
This is done in the same way as described in 1.4. Enter a foreign currency transaction.
To satisfy accounting requirement b), monetary assets and liabilities should be revalued at the year-end using the currency revaluation function:
1.Select Display > Currency revaluations > New currency revaluation .
2.Select the currency, enter the year-end date and the rate.
For example if your year-end is 31 December 2024 and the exchange rate on that date is €1.17 to £1, enter the new rate of €1.17 with a date of 31 Dec 2024.
When you click Save, balances in foreign currency accounts (in ledgers that have been ticked in ledgers analysed by currency) are re-translated to the base currency at the new rate.
The exchange difference between the balances translated at the new rate and the old rate, is recorded in the income and expenditure account: Exchange differences and charges. This is an automatic entry called a currency revaluation transaction (which has a CRV prefix). The revaluation transactions can be displayed by selecting Display > Currency revaluations. On the currency revaluation page, there is also a revaluation report, which shows the revaluation on each account.
If you require further details of how the currency revaluation function works, see Currency revaluation.
