GL hits are always in the domestic currency, regardless of the currency of the invoice and/or payment.STORIS can process purchases made from foreign vendors, allowing you to sell imported merchandise. This topic outlines the processes involved in ordering, receiving, AP billing, and check processing of foreign goods.
You must set up several files before you can process foreign vendors and their merchandise.
Bank Settings - create a bank record for each foreign country in which you do business.
Country Settings - specify the core values used in determining product costs, including the currency format and exchange rate.
Vendor Settings - create a vendor record for each foreign firm, specifying the proper currency type codes as well as whether to use estimated or actual exchange rates on AP bills.
Advanced Product Settings - for each product file associated with a foreign vendor, you must enter the costs in the country’s native currency.
During Purchase Order Entry, the system references the Estimated Exchange Rate field in the Country Settings when processing individual line items, but you can modify the exchange rate in Purchase Order Entry if needed.
Purchase order inquiry routines include an option to display in domestic or foreign currency.
Purchase order reports print using foreign currency figures only.
During warehouse receiving, items are received into inventory in domestic format.
All monetary amounts during container receiving and return-to-vendor procedures display with the foreign values, since these operations deal with the vendor directly.
For foreign vendors, the system places on Hold all purchase orders created via order entry.
In the Enter/Update Individual Vendor Invoice routine, you can change foreign exchange rates. In this way, you can modify the final AP bill to reflect the most current and accurate pricing for the items received.
AP bill inquiries display amounts in foreign currency, since the system uses these figures to generate checks for the foreign vendors.
AP bill reports display domestic figures, revealing exactly how much of your company’s assets you are spending.
Check processing approval worksheets display both foreign and domestic amounts, using the exchange rate from the associated AP bills. Depending on the Update Exchange Rate field in the Vendor file, the program may update the exchange rate from existing AP bills during actual check processing, making the necessary adjustments to the Exchange account. All credits and debits to General Ledger accounts are done in domestic accounts.
When setting up Foreign Processing, creating the following GL accounts can simplify tracking and reporting processes when gathering information on foreign transactions:
Accounts Payable GL Account (Country Settings) - used for all vendors in a given country. Set this up as a liability account.
Exchange GL Account (Country Settings) - handles payment adjustments during Check Processing based on adjusted exchange rates. Set this up as a profit and loss account.
Check Bank File (Bank Settings) - create a separate bank record for foreign vendors, and within that record create a separate cash account to handle all foreign payments. Set this up as an asset account.
GL hits are always in the domestic currency, regardless of the currency of the invoice and/or payment.
Create a bank record to handle payables with foreign vendors from a particular country. At the AP Cash Account field, enter the GL account number of the Cash account you want to debit when cash or checks are received.
Use the Country Settings to set up your basic parameters for Foreign Processing. Enter the following information for each country in which you do business:
type of currency,
Estimated and Actual exchange rates,
GL accounts for accounts payable and exchange amounts, and the
address mask for all vendors in the selected country.
You specify your domestic currency in the General System Control Settings.
If you have a vendor that resides in one country but you pay them in another currency, you must create a country that combines those elements. For example, for a vendor physically located in China to whom you remit in US dollars, you can create a Country record called CHNUS and specify a currency associated of US dollars.
Use the Vendor Settings to specify:
a currency for each vendor,
whether or not to use the actual exchange rate when calculating costs, and
which bank to use when processing checks (that is, the check print bank).
The following fields affect foreign processing functions:
Country - establishes the country in which the vendor resides. This field is mandatory.
Currency - establishes the currency information that prints on documents (purchase orders) and payments (accounts payable checks).
Update Exchange Rate - establishes your method for defaulting the exchange rate into the purchasing process.
Check Print Bank - establishes the code of the bank from which you usually draw accounts payable checks for the selected vendor.
You cannot assign non-inventory products to foreign vendors.
Use this file to specify the vendor for each product, as well as the replacement cost, specified in that vendor’s native currency.
The following fields affect foreign processing functions:
Vendor Number - establishes the vendor code for the foreign vendor that supplies this product.
Replacement Cost - establishes the cost (in foreign currency) for an individual unit of this product. When creating Purchase Orders, this amount displays in the correct foreign currency format. However, the average cost always displays as a domestic amount.