Nowadays, many companies deal with multi currencies in their daily financial transactions and it is ideal to keep accounting records in multi currencies to ease the management decision on financial issues.
It is reasonable to maintain euro bank account, US dollar account and Singapore dollar account for sales receipts and purchases in those currencies. This will reduce the currency exchange gain or loss from buying and selling of one currency to another and also save bank changes on conversion and most important expedite the money transfer process.
Common issues with Sage Accounts 2008 with multi currency postings
Sage default base currency is British Pound (GBP). The base currency can be changed to US dollar (USD). In addition, it can also maintain other currency bank accounts such as Euro, GBP, Chinese Reminbi (RMB) and so on.
This is an excellent software for companies dealing with multi currencies. However, It takes a bit of time to learn how to post transactions correctly in order to get the accurate result. It is recommended to contact Sage Line 50 technical support if you are unsure of how certain transactions are to be posted.
You must ensure the following reports agreed to each other as the first step to ensure transactions are posted correct.
- Trade debtors per Trial Balance (TB) agreed to aged debtors reports and the same goes for creditors. If you find reports do not agree to each other then it may be due to journals are directly posted to debtors/creditors control accounts where these entries will only be picked up in the TB but not in the aged debtors/creditors report.
- Bank balances in foreign currencies are not materially different to bank balances per Trial Balance.
If you find this is the case, then you must check your currency exchange rates entered in the system. For example, a company's reporting currency is in US dollar, ensure transactions in GBP are multiply by entering the currency exchange rate of 1.9973 NOT 0.5006 (rate as at 31/12/2007). Incorrect foreign exchange rates used will result in foreign exchange gain or loss at the year end. The foreign currency bank account can still be reconciled because transactions are entered in that currency.
Please feel free to send us email, should you have any questions regarding keeping accounting records in multi currencies.
