Orax SDI Cloud Reference

Foreign Currency Trading

The Orax SDI system has the ability to trade in a foreign currency using a Sales Invoice or Purchase Invoice. In this section we'll explain how this works and what the options are.

Exchange Rates
There is a basic set of Currencies in the system which downloads the exchange rate for each currency every morning. This means that there is a daily exchange rate available for these Currencies. If the Orax SDI system does not have the currency you require, it can be easily added to the currency list.

Local Currency
Your system requires that you set the correct local currency for your company in Company setup. All transactions in the Orax SDI system are recorded in this currency. This means that every GL account (local or foreign) and every transaction is saved in the ledgers in the local currency.

Foreign Currency Customer & Supplier Accounts
To trade in a foreign currency, set the currency of the applicable customer or supplier account to that currency. The system will automatically pickup that the customer or supplier is a foreign currency account when you create an invoice for that customer or supplier.

Trading in Foreign Currencies
When you create a Sales or Purchase Invoice the system will select the exchange rate for the applicable document date as the default rate for that document. You can change this should you want to transact at a specific exchange rate. The system allows you to enter amounts on the document in the foreign currency (fixed exchange rate) or in the local currency (default exchange rate). In both cases the amount will be saved in the database in the local currency with the applicable exchange rate for the document. This means that when a customer views the invoice the amount will be converted from local currency to foreign currency on the fly at the time of loading.

GL Accounts
As mentioned above, all transactions are recorded in the system in the local currency. There are no foreign Currencies in the GL. When an invoice, credit or statement is viewed by a customer or supplier, these amounts are converted to the foreign currency by the report.

Customer Statements
Foreign currency accounts will be best served using the "Foreign Currency Statement". This statement shows both the local currency and the foreign currency with the applicable exchange rate. The Ageing records will always be in the local currency.

Revaluation of Foreign Currency Accounts
Should you wish to present truly accurate foreign currency statements to customer, the account will have to be revalued on statement day to ensure that all outstanding amounts are revalued to the exchange rate of the current day. The Orax SDI system does not currently provide this functionality, so these Journal Entries will have to be done manually. If the "Foreign Currency Statement" is used for a customer account, this is not strictly speaking necessary, but it will require that the offshore customer is educated on the double currency statement, so they understand how to process payment amounts.

Foreign Currency Profit / Loss
When a customer makes payment against a foreign currency account, the profit or loss that results from the changes in the exchange rate has to be recorded in the account with a journal entry. There are ways to do this on the customer account or manually using the "Journals" tab on the Ledgers screen. To accurately enter these adjustments it will be required that the customer supply a payment advice showing which invoices they paid and how much for each.