Process Foreign Vendor Transactions

There are two methods to process foreign vendor transactions.

1. Using the Foreign Currency feature of Accounting Seed

2. Without using the Foreign Currency feature of Accounting Seed

GoldFinch includes the Foreign Currency feature without any additional cost. The Foreign Currency feature costs an additional fee if you are using the Accounting Seed as your accounting system.

Execute the following steps if you have the Foreign Currency feature of the Accounting Seed system:

1. Enable Multi-Currency in GoldFinch and Accounting Seed.

2. Configure Purchase Prices for the Vendor using Foreign Currencies, Unit of Measure, and Qty. Break.

3. Provide details of the Purchase Orders using a foreign currency. Ensure that the Unit Cost approximated to the Actual Invoice Cost because it will be used to calculate the inventory and subsequent COGS until the Purchase Invoice is posted.

4. Print or email the Purchase Order with the foreign currency amount.

5. Receive the inventory using the foreign currency. Inventory is calculated at the local currency.

6. Create and post the Purchase Invoice.
   The total Purchase Invoice amount must match the Vendor Invoice.  By default, the exchange rate is effective as per the invoice date, but this can be overridden.
   Inventory is updated using the updated Invoice Cost.  If the inventory is sold, COGS will be automatically updated. Do not repost the Whse. Receipt and update the Purchase Order if the Invoice Cost is different from the Purchase Order cost.

7. The Accounting Seed Payable record is created and posted using the foreign currency with the exchange rate that is used on the Purchase Invoice.

8. Cash disbursement must be created using the foreign currency. Accounting Seed will automatically calculate the exchange rate gain or loss when the cash disbursement is applied to the payable.

9. If the cash disbursement is posted as a prepayment, Accounting Seed will automatically calculate the exchange rate gain or loss and reverse out the prepayment, while applying the cash disbursement against the payable.

10. If the exchange rate for the cash disbursement is different from what is used on the purchase invoice, you can remove the Purchase Invoice posting, update the unit cost, and then post the Purchase Invoice to avoid the update of exchange rate gain or loss and to update the inventory with a more accurate cost. 

Execute the following steps if you do not have the Foreign Currency feature of the Accounting Seed system, and you have a few foreign currency transactions:

1. Configure Purchase Prices for the Vendor using the local currency, Unit of Measure and Qty. Break.

2. Provide details of the Purchase Orders using the local currency. Ensure the Unit Cost is approximated to the Actual Invoice Cost * the effective exchange rate because it will be used to cost inventory and subsequent COGS until the Purchase Invoice is posted.

3. Use the MS Excel application to update the Purchase Order to manually change the Unit Cost and Amount to the foreign currency, before sending it to the vendor.

4. Receive the inventory using the local currency. Inventory is calculated at the local currency.

5. Create and post the Purchase Invoice.
   The total Purchase Invoice amount must match with the Vendor invoice amount * the effective exchange rate. 
   Inventory is updated using the updated Invoice Cost. If the inventory is sold, COGS will be automatically updated. Do not repost the Whse. Receipt and update the Purchase Order if the Invoice Cost is different from the Purchase Order cost.

6. Payable record is created and posted using the local currency.

7. Cash disbursement must be created using the local currency.  

8. Cash disbursement can also be created as a prepayment using the local currency. 

9. If the exchange rate for the cash disbursement is different from what is used on the Purchase Invoice, you can provide another payable to record the exchange rate gain or loss, or you can remove the Purchase Invoice posting, update the unit cost, and repost the Purchase Invoice to avoid the update of exchange rate gain or loss and to update inventory with a more accurate cost.