Re: [SL] Cross currency invoice entry

[Ed W <li...@wi...>]

Hi

> The point is it does not *HAVE* to be entered as Accounts Payable.
>
> It may, but it also may be entered as a straight General Ledger entry,
> which avoids all this nuisance :-)-O.
>  =20

Yes, but that doesn't track my stock which is the whole point.

Lets consider it more an exercise to see how this ought to be done.

Purchase:

100 Widgets @ $1
50 bloopers @$2
Delivery @ $25

This is invoiced on 1st June 2006 (spot rate 1.8)

There are generous payment terms and it will be paid for on 1st Jan 2007 =

(spot rate 1.9)

I incur a VAT charge from UK customs when the goods enter the country=20
and hence I effectively pay out 17.5% of the value on 1st June 2006 (I=20
recover it in my tax return at the end of the quarter of course).

The point here is that if I don't show the cost of the purchased items=20
until 1st Jan 2007 then my cost of goods is inaccurate and also my=20
management accounts are incorrect and worse still I look suspicious to=20
the VAT office because I am reclaiming VAT on purchases that I don't=20
appear to have made



To enter this I tried the following:

1) Enter in purchase invoice in USD.  System converts it to nominal=20
sterling value as at 1st june 2006
2) Then enter Cash|Payment for this invoice and enter in $225 as at 1st=20
Jan 2007.  System appears to pickup the rate at that date and puts two=20
transactions into the cash account, one for a $225 and the other for=20
around $106 ish (basically it seems to be doing a funny currency=20
conversion whilst still trying to make $100 =3D=3D =A3100 to keep the led=
ger happy
3) Now I am stuck... Probably I have to do the reverse to actually pay=20
this thing properly, but I don't understand what is happening.
4) Additionally in real life my rate is not the spot as of 1st Jan 2007=20
and its slightly different, hence I need a second currency FX=20
gain/loss...  Probably just enter this in as a transfer, but I still=20
haven't got my head around this $1 =3D=3D =A31 thing..

Does anyone else understand what SL is trying to do during the above?


> The point here is that you *can* *NOT* pay or claim UK taxes on a US
> purchase.
>
> Thus you can not reclaim VAT in the UK for an invoice made out in the U=
S.
>  =20

Well, it's a technicality, but UK customs slap me with a VAT bill when=20
the goods arrive in the country.  Hence as near as damnit I pay UK VAT=20
on US purchases...  Actually it's just a passthrough cost and I get it=20
back at the end of the quarter, but I still need to fill in the return=20
plausibly or I can expect a query that I have entered everything=20
correctly.  There are bands of expected behaviour and if I am reclaiming =

vastly more than 17.5% of my nominal purchase invoices then it's going=20
to stand out...

> GL entry.
>  =20

Doesn't account for cost of goods where I am tracking the items


Grateful if anyone can help unwind this mess for me please

Cheers

Ed W