Overview:

Zumzum Financials handles currency gain/losses to ensure accurate financial reporting on the balance sheet, particularly for outstanding Sales Invoices, Bank Balances, and Purchase Invoices. When transactions are posted to the General Ledger, they include entries in the Base Currency, Company Currency, and Foreign Transaction Currency. Due to currency fluctuations, the system manages currency reevaluations to reflect the actual value of these transactions. Currency gains and losses for Sales and Purchase Invoices are calculated when the invoices are fully settled, though unpaid amounts and bank balances are not currently revalued.

Issue: How does Zumzum Financials handle currency gain/losses?

Outstanding Sales Invoices, Bank Balances and Purchase Invoices would need to reflect the actual value to the company on the balance sheet.

Solution

When a transaction is posted to General Ledger, the entry is posted with the Base Currency, Company Currency and Foreign Transaction Currency.  Due to currency fluctuations and the need to accurately track the value of currency transactions, the system needs to handle currency reevaluations.

Sales Invoice currency gains/losses – this is done at the time the sales invoice is fully settled. However, depending on the client’s requirements, it may be necessary to revalue the transaction when a payment is allocated to a Sales Invoice Line Item.

Unpaid amounts for Sales Invoices are not currently revalued.

Purchase Invoice currency gains/losses – this is done at the time the purchase invoice is fully settled.

Unpaid amounts for Purchase Invoices are not currently revalued.

Bank Balances are not revalued, this would be a feature that needs to be added.

Learn more about bank payment and paying money to suppliers or for other expenses in Zumzum Financials