Forex Transactions Tutorial

Overview#

Forex transactions, or foreign exchange transactions, involve the exchange of one currency for another in the foreign exchange market. These transactions are commonly used for international trade, investment or travel, allowing entities to buy or sell foreign currencies at agreed exchange rates.

Although transactions can be recorded in multiple currencies, the financial statements are always prepared in a single currency, which requires foreign currencies to be converted to the local currency.

Sometimes customers pay into a local account using foreign currency or a foreign supplier is paid from a local bank account. In these cases, foreign exchange gains or losses occur.

💡These tutorials explain how to set up QuickEasy BOS Professional to enable multi-currencies, and how to capture foreign exchange gains or losses.

How to Enable Multi-Currency#

1. Navigate to Main Menu > Setup > Accounting.
2. Select Settings (tab).
3. Click the arrow next to Currencies to open it:
   1. Enable Multi-currency = Select Yes.
   2. Set the Name of your Local Currency.
   3. Name: Major Currency = Enter the names of your major currency (e.g. notes).
   4. Name: Minor Currency = Enter the names of your minor currency (e.g. coins).

How to Set Up Currencies#

1. Navigate to Main Menu > Setup > Accounting.
2. Select Settings (tab).
3. Click the arrow next to Currencies to open it.
4. Click Edit next to Currencies:
   1. Enter the Currencies you want to use, starting with your Local Currency.
   2. Set a Base Value for your currencies.
      • The base value of your Local Currency is always 1.
      • Get a guide rate quickly by asking a search engine (e.g. for Rand to Dollars, type in: How many dollars can R1 buy? The answer is in the correct format to enter in the Base Value column.)
      • You can use up to 6 decimal places.

How to Set Up Denominations#

1. Navigate to Main Menu > Setup > Accounting.
2. Select Settings (tab).
3. Click the arrow next to Currencies to open it.
4. Click Edit next to Denominations.
5. Fill in the Denominations for your Local Currency:
   1. The Description is the Currency in words and symbols (e.g. Two Hundred Rand - R200).
   2. Insert a specimen image.
      • Note: Find specimen images on the website of your central bank (e.g. The South African Reserve Bank).

How to Create and Set Up Transaction Types for Forex Gains or Losses#

1. Navigate to Main Menu > Setup > Accounting.
2. Go to the Entry Types tab.
3. Check the checkboxes in the Forex column for the following transactions:
   1. Supplier Debit Notes
   2. Supplier Discounts
   3. Supplier Invoices
   4. Supplier Offset
   5. Supplier Payments
   6. Supplier Refund
   7. Customer Credit Notes
   8. Customer Discounts
   9. Customer Invoices
   10. Customer Offset
   11. Customer Receipts
   12. Customer Refund
4. Check that the following Entry Types exist:
   1. Supplier Forex Gain
   2. Supplier Forex Loss
   3. Customer Forex Gain
   4. Customer Forex Loss
5. If they are not there:
   1. Click Add Entry Type (button) and create the Entry Types below. Fill in the fields specified, leave the others blank:
      • Entry Type = Customer Forex Gain
      • Code = CFX+
      • Default = CFG
      • Add Item = Enabled
      • Dr Account = Customer
      • Cr Account = Forex Gains / Losses
      • VAT Type = No VAT
      • Entry Type = Customer Forex Loss
      • Code = CFX-
      • Default = CFL
      • Add Item = Enabled
      • Dr Account = Forex Gains / Losses
      • Cr Account = Customer
      • VAT Type = No VAT
      • Entry Type = Supplier Forex Gain
      • Code = SFX+
      • Default = SFG
      • Add Item = Enabled
      • Dr Account = Supplier
      • Cr Account = Forex Gains / Losses
      • VAT Type = No VAT
      • Entry Type = Supplier Forex Loss
      • Code = SFX-
      • Default = SFL
      • Add Item = Enabled
      • Dr Account = Forex Gains / Losses
      • Cr Account = Supplier
      • VAT Type = No VAT

How to Set Up Bank Accounts for Foreign Currency#

1. Navigate to Main Menu > Setup > Accounting > Accounts.
2. Navigate to Bank Accounts (Statement of Financial Position > Assets > Bank).
3. For each Bank Account, select a Currency from the dropdown list in the Currency column.

How to Create Forex Gains or Losses for Customers Automatically#

1. Create a Customer Receipt.
2. If an amount is left over on either the payment or invoice, click Menu (button) in the Outstanding section and select Record Forex Exchange Gain / Loss.

How to Create Forex Gains for Customers Manually#

1. Navigate to the Main Menu > Accounting > Ledger.
2. Click New (button) > Customer Transactions > Customer Forex Gain.
3. Dr. Customer = Enter the Customer Account.
4. Enter the Amount.
5. Select No VAT.
6. Click View (button) > Items.
7. Allocate the amount to any Outstanding Invoices, Credit Notes or Overpayments.

How to Create Forex Losses for Customers Manually#

1. Navigate to the Main Menu > Accounting > Ledger.
2. Click New (button) > Customer Transactions > Customer Forex Loss.
3. Cr. Customer = Enter the Customer Account.
4. Enter the Amount.
5. Select No VAT.
6. Click View (button) > Items.
7. Allocate the amount to any Outstanding Invoices, Credit Notes or Overpayments.

How to Create Forex Gains or Losses for Suppliers Automatically#

1. Enter a Supplier Payment.
2. If an amount is left over on either the payment or the invoice, click Menu (button) in the Outstanding section and select Record Forex Exchange Gain / Loss.

How to Enter Forex Gains for Suppliers Manually#

1. Navigate to the Main Menu > Accounting > Ledger.
2. Click New (button) > Supplier Transactions > Supplier Forex Gain.
3. Dr. Supplier = Enter the Supplier Account.
4. Enter the Amount.
5. Select No VAT.
6. Click View (button) > Items.
7. Allocate the amount to any Outstanding Invoices, Debit Notes or Overpayments.

How to Enter Forex Losses for Suppliers Manually#

1. Navigate to the Main Menu > Accounting > Ledger.
2. Click New (button) > Supplier Transactions > Supplier Forex Loss.
3. Cr. Supplier = Enter the Supplier Account.
4. Enter the Amount.
5. Select No VAT.
6. Click View (button) > Items.
7. Allocate the amount to any Outstanding Invoices, Debit Notes or Overpayments.