How do I set up Multiple Currencies in Gold?

Q: How do I set up Multiple Currencies in Gold? We are in Canada and also deal in USD.

MoneyWorks Gold and MoneyWorks Datacentre will manage multiple currencies. The first step is to turn on that capability in document preferences.

Turning on Multiple Currencies

In your Setting Up navigator window click Documents Preferences [Red Arrow] or go the Edit menu at the top of your computer screen and choose Document Preferences.

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In either case the Document Preferences window will open, choose the Locale/Currency Tab [Red Arrow].  The location you selected when you created your file will be shown [Green Arrow]. Check Use multiple currencies in this document [Blue Arrow] and select your base currency, the one that your company file going top reporting in e.g. CAD Canadians dollars [Orange Arrow] Click OK.

Note: the “Use custom base Currency format” refers to adding the currency sign at the front or back for Quebec and other locations. Leave blank and the default is the front.

Setting up the currencies

In your Chart of Accounts navigator window [Red Arrow] click the + sign next to Currencies [Blue Arrow]…

Seriously Good accounting software for the MacOr just go to the Show menu at the top of your computer screen and choose Currencies, which openis the Currency window where you click New.

In either case a new Currency window will open where you select choose the foreign currency that you want to set up from the large list [Red Arrow], The name will auto fill [Green Arrow] which you can change of desired and then enter the Unrealized Loss/Gain account and the Currency Loss/Gain account from your chart of account.

Since you most likely do not have either of these accounts set up click into the first account field [Blue Arrow] and push the Tab key on your keyboard…

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which will open your account choices window [Orange Arrow] and click New [Purple Arrow].

Seriously Good accounting software for the MacCreate a new account assigning an unused code e.g, 9998 and set the type as Income, click OK, then select Use from the Account Choices window, which will enter it into the Unrealized Loss/Gain field. In other words we created a new account on the fly.

Then do the same thing for the Currency Loss/Gain account e.g. Code 9999 and set the type to Expense as shown below and again click Use to insert in to the Currency Loss/Gain field.

Seriously Good accounting software for the MacNote: these two accounts are used by MoneyWorks to manage the currency exchange and in most cases will not have reported balances in the reports, hence coding them to the bottom of the chart that we are using.

With the two accounts assigned, set your exchange rate to the current rate [Red Arrow] e.g. 0.9704 or 1 CAD = .9704 USD. This is the starting System Rate which we will explain further down.

Note: MoneyWorks auto created a USD bank account [Blue arrow] which you can change the code to an unused code if desired. MoneyWorks uses this bank account and requires bank account, regardless of whether you have a real USD bank account or not. If you have more than one, or USD credit cards they can be created later.

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Assuming that you either sell in USD and/or buy in USD check the two boxes (Green and Orange) and MoneyWorks will create a USD receivables account and a USD payables account. Note: the entries into these three USD accounts will be in USD when creating transactions (receipts, payments, invoices). However the recorded balances will be reported in your financial reports in your base currency e.g. Canadian in this example. And reported at the then current system rate.

Role of the System Rate

The System Rate assigned to the currency is used to report the USD assets (Bank and AR) and liabilities (AP) in the base currency e.g. Canadian in the file at the time of running the reports, not the time of entry of the transactions. Each time that you change the system rate, MoneyWorks will automatically create a Journal entry that reflects the currency exchange rate to these asset and liability accounts.

In other words if the CAD dollar decreases in value and moves closer to par with the USD at the time you are running your monthly, quarterly, or annual reports the value of your USD assets (funds on hand or outstanding receivables will decrease and your outstanding payables will increase when reported in Canadian dollars. Obviously reversed if you are looking at this from USA side of the border. So in practice you only reset the  system currency rate once a month, to revalue any foreign currency assets/liabilities that are present.

As secondary purpose the System Rate is the default rate on transactions, if you do not manually set the rate at the time of entry or posting.

Assigning currency to customers & suppliers

In order to preset the currency when dealing with foreign customers or suppliers, you set the currency in their names record under Pricing & Terms [Rad Arrow] selecting the foreign currency e.g. USD in our example.

Note: You are setting the currency, that you invoice foreign customers in and/or buy from foreign suppliers, not necessarily the currency in which you pay the invoices or that the customer pays you in. In version 6 foreign customers can pay for invoices in base currency as well as foreign currency.

Assigning Currency to Products

In our example the company buys parts from a US supplier. In the Item record you set the currency that you purchase the Item in, e,g, the buy price. Red & Blue arrows below that you should be able to figure out by now.

Seriously Good accounting software for the macSelling price is set in base Currency or if you also sell this item to US customers you can set the USD selling price in level B and then assign that pricing level to the USD customers.

Assigning currencyMoneyWorks automatically handles the base currency value of your stock on hand based the assigned exchange rate on the supplier invoices that you enter or if you are paying COD the exchange rate used at that time. Assigning the B pricing level to the US customers in this case, just sets aSRP in USD as a default reference when selling. Obviously you can change the selling price in invoices on the fly when entering them.

Entering Invoices in foreign currency

In this example we are receiving parts from a US supplier in May, well after we originally set up the System Currency Rate. Filling in the Supplier code [Red Arrow] sets the currency to USD [Blue Arrow] for this transaction, filling in the qty and Item number sets the price and value of the supplier invoice.

Note: the value of the parts is $2000 USD + tax if desired and the CAD value is shown under the exchange button [Blue Arrow].

To reset the exchange rate for this transaction click the exchange button [Blue arrow] which opens the Currency Rate window showing the system rate. Uncheck “Use the system rate at posting time [Orange Arrow] and reset the rate to the current rate [Green Arrow] or the rate that you want to use for this one invoice when you post it. Click OK.

The value of your goods received in this case has been set to an exchange rate .9995 or for the $2000 USD or a Canadian value of $1,999.

In June when I finally decide to pay for the outstanding invoice, I enter the Supplier code in a Payment, which lists the outstanding invoice for the US Parts Company, sets the Currency to USD [Red Arrow] and automatically selects my USD bank account. There is no exchange rate calculation occurring as you are paying the USD invoice in USD from your USD bank Account.

Seriously Good Accounting SoftwareWhich is perfect if you actually have a USD bank account.
However if you did not a real US bank account and were paying the invoice from your CAD bank with a set exchange rate issued by the bank or a USD money order that you purchased from your bank at a set exchange rate, you could change the Bank Account in this transaction (or credit card, if paying by credit card) to a CAD based Account.
Change the Bank Account [Red Arrow] and an info message open [Green Arrow]. Read the message and click OK [Blue Arrow] and the Confirm information window opens [Orange Arrow] where you can set the CAD value for the USD invoice (whatever the bank charged you or your best guess at todays rate) [Purple Arrow] and click OK to the Confirm window which will post the transaction.
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The posted Payment when opened in the Payments transaction list shows that the CAD bank account was credited $2,270 CAD and the USD AP account was debited 2260 USD.
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Foreign Currency customer invoices work the same way excepting that receipts are applied when the customer finally pays the outstanding receivables and similarly to the invoices and payments above you can set the exchange rate for each transaction or also as above, if the US customer a paid you in your base currency e.g. CAD in our example that can also be recorded.

Funds transfers

Besides Payments, Receipts and Invoices, the only other transaction that you can perform in a foreign currency is to transfer funds between you base currency and foreign currency bank accounts.

Click the Funds Transfer button in the Cash & Banking Navigator or go to the Command menu at the top of your computer screen and choose Transfer Funds…

The funds Transfer window opens where you set the Bank where the Funds are moving from, e.g. CAD chequing [Red Arrow] and the Bank you are moving the funds to e.g. USD Bank [Blue Arrow]. Set the amount you are transferring from the bank account e.g. 1,000 [Orange Arrow]. Set the date of the Transfer [Green Arrow] and because we are dealing with two different currencies, you can set the actual rate or actual US dollars e.g. 1,017.00 that the bank has given you [Purple Arrow], Click Transfer.
Assigning Currency to Products
And MoneyWorks creates a Payment to record the credit to the CAD bank and the debit to the USD bank.
Assigning Currency to ProductsBottom line is that MoneyWorks has recorded currency rates by transaction as they occurred, thus affecting stock on hand values when receiving, converting to your base currency and tracking your foreign assets & liabilities which get reported in base currency within your financial reports, calculated at your System Currency Rate, that you set once a month for that purpose.
e,.g the current Balance Sheet lists the USD Bank account at $1,018.53 Canadian [Red Arrow].
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Because the System Currency Rate for the USD currency is set at 0.9985 or $1.00 CAD equals $ 0.9985 USD.
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Hence the purpose of setting your System Currency Rates once a month, before doing your reports.
For more on Currencies check the pdf Manual under the Help Menu or contact MoneyWorks support at support@moneyWorks.ca

For more information about MoneyWorks Support in Canada, in the USA, or in the UK contact www.moneyworkssupport.wordpress.com

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