Overview

In today’s globalized business environment, managing multiple currencies is essential for companies that deal with international transactions. iVendNext provides robust tools for currency management, including setting up currency exchange rates, handling foreign exchange differences, and automating exchange rate revaluation. This article will guide you through the process of managing currencies in iVendNext, ensuring accurate financial reporting and compliance.

1. Setting Up Currencies

1.1 Assigning Currency to Accounts

To get started with multi-currency accounting, you need to assign a currency to your accounts:

1. Navigate to Home > Accounting > Chart of Accounts.

2. Create or edit an account and assign the appropriate currency.

3. Save the account.

This ensures that transactions in foreign currencies are recorded accurately.

1.2 Default Currency

Each company in iVendNext has a Default Currency set in the company master. This is the base currency used for financial reporting. Ensure that the default currency is correctly set for your company.

2. Managing Currency Exchange Rates

2.1 Currency Exchange Form

iVendNext allows you to manually store exchange rates for currencies. This is useful when you want to use fixed exchange rates instead of real-time market rates.

1. Navigate to Home > Accounting > Multi Currency > Currency Exchange.

2. Click on New to create a new currency exchange rate.

3. Enter the From Currency and To Currency.

4. Specify the Exchange Rate (e.g., 1 USD = 83.86 INR).

5. Select whether the rate applies to Selling, Buying, or both types of transactions.

6. Save the currency exchange rate.

2.2 Freeze Exchange Rate

iVendNext allows you to freeze exchange rates for specific transactions. This is useful when you want to lock in an exchange rate for a particular transaction.

1. Navigate to Accounting > Accounting Masters > Accounts Settings.

2. Under the Currency Exchange section, enable Allow Stale Exchange Rates.

3. Save the settings.

Once enabled, the exchange rate field in transactions will be frozen, and you can manually enter the exchange rate.

3. Handling Foreign Exchange Differences

3.1 Exchange Gain/Loss Account

When dealing with foreign currencies, exchange rate fluctuations can lead to differences in transaction amounts. To manage these differences:

1. Create an Exchange Gain/Loss Account in your Chart of Accounts.

2. This account is typically placed under the Expense side of the Profit and Loss statement.

3.2 Managing Exchange Differences

When a payment is received at an exchange rate different from the one in the invoice:

1. Create a Payment Entry in iVendNext.

2. The system will automatically calculate the exchange difference.

3. The difference will be posted to the Exchange Gain/Loss Account.

4. Exchange Rate Revaluation

4.1 What is Exchange Rate Revaluation?

Exchange rate revaluation is the process of adjusting the balances in General Ledger accounts to reflect changes in currency exchange rates. This is particularly important when closing your books or updating financial statements.

4.2 How to Perform Exchange Rate Revaluation

1. Navigate to Home > Accounting > Multi Currency > Exchange Rate Revaluation.

2. Select the Company and click on Get Entries.

3. The system will fetch accounts with currencies different from the default currency.

4. Click on Create Journal Entry to generate the revaluation entry.

5. Submit the journal entry to update the General Ledger.

4.3 Automating Exchange Rate Revaluation

You can automate the exchange rate revaluation process:

1. Go to the Company Master under Setup > Company.

2. Enable Auto Creation of Exchange Rate Revaluation in the Exchange Rate Revaluation Settings.

3. The system will automatically create revaluation entries based on the specified frequency.

5. Best Practices for Currency Management

• Regular Updates: Regularly update currency exchange rates to reflect current market conditions.

• Revaluation: Perform exchange rate revaluation periodically to ensure accurate financial reporting.

• Exchange Gain/Loss Account: Maintain an Exchange Gain/Loss account to handle currency differences effectively.

• Freeze Rates: Use the freeze exchange rate feature for critical transactions to avoid fluctuations.

Conclusion

Currency management in iVendNext is a powerful feature that allows businesses to handle multi-currency transactions with ease. By setting up currencies, managing exchange rates, and performing regular revaluations, you can ensure accurate financial records and compliance with international accounting standards. Follow the steps outlined in this article to effectively manage currencies in iVendNext and streamline your financial operations.