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Change the rates or the amount paid. Every posting updates.
1 · The invoice
2 · The payment
3 · Month end
Rates are examples. Company currency: INR.
USD 1,000 at ₹83 — the customer’s account is kept in USD, the books in INR.
USD 1,000 received at ₹84.2.
The rupee was weaker when the money came in: a realised gain.
Customer owes
USD 0
Same balance in INR
₹0.00
Gain / loss
+₹1,200.00 realised
Realised
The money has arrived.
The difference between the invoice rate and the payment rate is final. ERPNext posts it as an Exchange Gain Or Loss journal to the company’s Exchange Gain / Loss Account.
Unrealised
The invoice is still open at month end.
Exchange Rate Revaluation restates the open balance at the closing rate and posts the difference to the Unrealized Exchange Gain/Loss Account. It can still move until the customer pays.
Left out to keep it readable
When a foreign-currency payment is allocated to an invoice at a different rate, ERPNext creates a separate Journal Entry of type Exchange Gain Or Loss between the party account and the company’s Exchange Gain / Loss Account.
Realised is fixed once the money arrives. Unrealised is the movement on balances still open at the period end, posted by Exchange Rate Revaluation to the Unrealized Exchange Gain/Loss Account.
No. The gain/loss journal touches only the rupee value of the customer’s account, so it ends at zero in both dollars and rupees.
On the Company: Exchange Gain / Loss Account and Unrealized Exchange Gain/Loss Account, plus a receivable account in the foreign currency for the customer.
We set up multi-currency customers, suppliers and bank accounts in ERPNext, with the gain and loss accounts in place. Talk to a consultant.
or write to info@acube.co
Kochi (Kadavanthra & Infopark) · Thiruvananthapuram · across India & overseas · In business since 2011