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Re: Journals, accounts and foreign currency

Mohammad Alhashash
- 05/13/2015 04:06:00

On 13/05/15 00:21, Eva Pinter wrote:
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Hi all,

I wanted to know if I am doing something wrong with the journals, accounts and foreign currency

1. It’s not possible to pay (using the menu point pay) in a foreign currency if you do not have a journal in that currency.
Te be able to own or handle foreign currency, you need to have a bank account or cash register in this currency. Bank/Cash accounts in Odoo are represented by a journal of type "Bank and Checks" or "Cash" and the associated financial account with internal type "Liquidity". The financial account must be set as the default debit/credit account of this journal.
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2. If you want a journal in a foreign currency, you need to have an account in that very currency.
This is not enforced technically (I think so but I did not to verify it). Note that you use any currency with accounts without secondary currency. When you set a secondary currency on account it, enforces that any transaction must include the amount in that currency. So account secondary currency is actually a constrain.

Also, any account can be used in any journal unless it is restricted by the journal control option.

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3. Even with an account in foreign currency, you cannot reconcile in foreign currency. The reconciliation is always done in the local currency, creating so exchange differences on each and every single reconciliation.
Currently, manual reconciliation works on the company currency, so, it does not match amounts in foreign currency or create exchange gain/loss entries; you have to create it manually or use write-off during reconciliation..

For example, If your company currency is USD and you registered a 1000EUR supplier invoice at 1250USD equivalent. Later, you paid 1000EUR at 1100USD equivalent. If you paid using a voucher (Supplier Payment or used the "Pay" button on invoice), the exchange gain will be recorded. But, if you did not reconcile in the voucher and used the manual reconciliation later, you would see the 1250USD due amount and the 1100USD payment. You can select both lines and choose "Full reconcile with write-off" in the wizard. You should select the exchange gain account as the write-off account. Another option is to create a manual journal entry for the 150USD gain (with 0.00EUR eq.) to reconcile the 3 lines in the payable accounts (1250 Cr., 1100 Dt, and 150 Dt.)

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4. If you have an approval concept and use a temporary account on which you first post the payment until the bank/credit institute confirms it, you have to create a corresponding journal and account.
This is called "Clearing Accounts", you can do this. Actually, this is the standard way of handling bank accounts in most other ERP systems. For example, In SAP, usually there are 3 clearing accounts for each bank account.

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5. If you have multiple payment institute (typically: bank, postbank, paypal, AFEX, FOREX) and work in 3 currencies (EUR, GBP, USD), you will then have to create for each payment institute a 6 GL accounts and 6 journals. So, in my case, 30 GL accounts and journals.
Yes. Note that each bank will create a separate bank account for each currency and will issue different statements for each. Also, it may be legally required (or at least it is the standard accounting practice) to have a separate account and journal for each bank account.

You should organize your accounts in a tree structure. For example, create a view for each currency, then a view for each bank account, then under the bank view, create the bank and clearing accounts.


Mohammad Alhashash