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update multi currency accounting documentation to remove incorrect info (#10404)

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tundebabzy 2017-08-16 07:11:56 +01:00 committed by Makarand Bauskar
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erpnext/docs/user/manual/en/accounts/multi-currency-accounting.md
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@ -23,6 +23,15 @@ You can change accounting currency in Party / Account record, until making any t
In case of multi-company setup, accounting currency of Party must be same for all the companies.
### Exchange Rates
When dealing with multiple currencies, ERPNext has the Currency Exchange module for managing exchange rates. It allows you to save the exchange rate quotes you require.
For foreign currency transactions, ERPNext checks Currency Exchange for any matching record. If this fails, ERPNext will attempt to get the exchange rate quote from [fixer.io](http://fixer.io). If this still fails, then the exchange rate will have to be entered manually.
#### Exchange Rate Selection
ERPNext automatically fetches the latest exchange rate available.
## Transactions
### Sales Invoice
@ -50,61 +59,6 @@ In Accounts table, on selection of foreign currency account, system will show Cu
<img class="screenshot" alt="Journal Entry in multi currency" src="/docs/assets/img/accounts/multi-currency/journal-entry-row.png">
#### Example 1: Payment Entry Against Customer With Alternate Currency
Suppose, default currency of the company is INR and customer's accounting currency is USD. Customer made full payment against an outstanding invoice of USD 100. Exchange Rate (USD -> INR) in Sales Invoice was 60.
Exchange Rate in the payment entry should always be same as invoice (60), even if exchange rate on the payment date is 62. The bank account will be credited by the amount considering exchange rate as 62. Hence, Exchnage Gain / Loss will be booked based on exchange rate difference.
<img class="screenshot" alt="Payment Entry" src="/docs/assets/img/accounts/multi-currency/payment-entry.png">
#### Example 2: Inter-bank Transfer (USD -> INR)
Suppose the default currency of the company is INR. You have a Paypal account for which Currency is USD. You receive payments in the paypal account and lets say, paypal transfers amount once in a week to your other bank account which is managed in INR.
Paypal account gets debited on different date with different exchange rate, but on transfer date the exchange rate can be different. Hence, there is generally Exchange Loss / Gain on the transfer entry.
In the bank transfer entry, system sets exchange rate of the credit account (Paypal) based on the average incoming exchange rate. This is to maintain Paypal balance properly in company currency. In case you modify the average exchange rate, you need to adjust the exchange rate manually in the future entries, so that balance in account currency and company currency are in sync.
Then you should calculate and enter Exchange Loss / Gain based on the Paypal exchange rate and the exchange rate on the transfer date.
Lets say, Paypal account debited by following amounts over the week, which has not been transferred to your other bank account.
<table class="table table-bordered">
<thead>
<tr>
<td>Date</td>
<td>Account</td>
<td>Debit (USD)</td>
<td>Exchange Rate</td>
</tr>
</thead>
<tbody>
<tr>
<td>2015-09-02</td>
<td>Paypal</td>
<td>100</td>
<td>60</td>
</tr>
<tr>
<td>2015-09-02</td>
<td>Paypal</td>
<td>100</td>
<td>61</td>
</tr>
<tr>
<td>2015-09-02</td>
<td>Paypal</td>
<td>100</td>
<td>64</td>
</tr>
</tbody>
</table>
Suppose, Exchange Rate on the payment date is 62 and Bank Transfer Entry will be look like below:
<img class="screenshot" alt="Inter Bank Transfer" src="/docs/assets/img/accounts/multi-currency/bank-transfer.png">
## Reports
### General Ledger