How to process foreign transactions in Sage 50 Accounts when you don't use the Foreign Trader module

How to record foreign currency transactions and deal with exchange rate differences. However, if you're not using Foreign Trader and you need to record foreign currency transactions, this article explains how.

NOTE: This article applies to Standard VAT only. If you use the VAT Cash Accounting scheme, please follow these steps in this guide.

How to record the transaction

As the Foreign Trader module is not in use, you should record the transaction in the same currency as your base currency. This may mean you need to convert the value to the base currency.

 

To do this you can enter the relevant exchange rates:

1. Click Settings then click Currencies.
2. In the value column press F5 to use the currency calculator.

This converts it to your base currency when you enter the value of the transaction.

For more information, use our handy currency calculator guide.

 

To account for exchange rate differences

There may be instances where the payment or credit note uses a different exchange rate to the original invoice. This means that the base currency values don't match and you have an outstanding value for the difference. To account for this difference you need to post a credit or an invoice to an exchange rate variance nominal code. We recommend you use nominal code 7906 for this.

If the outstanding value is on the invoice you should post a credit note for the difference and allocate this to the invoice.

If the outstanding value is on the payment you should post an invoice for the difference and allocate this to the payment.

 

To post the revaluation

In this example, the converted invoice base currency value is £100 but the payment is £80. This leaves £20 outstanding on the invoice.

1. Customers > Batch Credit > enter the details as follows:
   
   

   A/C	Date	N/C	Details	Net	T/C	VAT
   Choose the required customer account.	Enter the same date as the payment.	Choose the revaluation nominal code - 7906.	Enter the required details.	20.00	T9	0.00

2. Save > Close.