Foreign Exchange Gain / Loss

Khameleon will record foreign exchange gain/loss to the General Ledger to the accounts that are identified in the Setup Company control records as multi-currency payables and receivables are settled.

For example, a payables voucher is entered as a multi-currency voucher because the vendor payment will come from your foreign bank account for that currency. The voucher foreign transaction amount is $26,000 MXN Pesos and that is what the vendor expects to be paid. At the time the voucher was entered, the Table exchange rate was $13 MXN to $1 USD. The Credit to the AP trade account in the GL would be in USD for $2,000. When the payment is processed, the exchange rate is $13.5 MXN to $1 USD. The vendor payment is still $26,000 but the translation of that amount is now $1.925.92 USD. The system will make an entry to the GL for the difference. In this example, the system transaction would be a $78.08 debit to AP Trade and $78.08 credit to the Foreign Exchange gain/loss account defined in the setup.

During the check processing, check stub review, the multi-currency window will pop up and displays the rate that the payment is being settled at. That rate can be changed. The exchange rate could be changed to reflect the original voucher entry rate and therefore, there would be no FX gain/loss recorded. An organization might chose to incorporate this process and pick up the FX gain/loss during the Revaluation process (See Revaluation).

It is the same concept for receivables and the multi-currency window will pop up during cash receipt entry and the valuation date and/or exchange rate can be modified.

Accounts Payable Check Processing for Foreign Payments

Khameleon currently does not support printing foreign checks. This is due to the complexities of the check stock formats and typically most payments are done via wire or ACH.

Foreign payments must be handled as manual checks, ACH or Wires. The Bank Master for the foreign account must be set to Pay Type O (Other). Likewise, when entering a multi-currency voucher to be paid in the foreign currency, the Pay Type must also be O.