Understanding NAV Currency, Part 2: Entering a Foreign Currency Sales Invoice

In our previous post on understanding NAV currency, we covered the topic of NAV currency setup, including general ledger, currency and exchange rates.

In this post, we’ll continue the discussion by entering a foreign currency sales invoice in NAV.

As with our previous post, we’ll use Cronus Mexico for our examples.

But before we start, let’s set up our currencies and exchange rates to make our examples super obvious.

We begin by navigating to Currencies:

And we select USD:

After, let’s return to the exchange rate screen:

We enter rates for 10/1/2016, 10/31/2016 and 11/15/2016.

By entering 100 in the exchange rate amount column, we allow the entry of more decimals in the relational exchange rate column. (I followed the default setup in NAV for this, but it’s your choice.)

Now, let’s enter an invoice.

If we look up Spotsmeyer’s Furnishings, we see it’s a USD customer:

Before we begin, we need to make sure that the Foreign Trade Fast Tab—which allows us to enter the currency code—is after the general fast tab but before the lines.

We need to enter the currency BEFORE we enter the lines. If we do it after, the system tells us it will recreate the lines, but it doesn’t quite work.

For the purposes of this example, the following fields are required:

General Fast Tab:

Customer: 01121212 – Spotsmeyer’s Furnishings

Posting Date: 10/5/2016 (This is very important as this date drives the exchange rate)

Document Date: 9/15/2016 (This shows that document date DOESN’T drive the exchange rate)

External Document: TEST

Foreign Trade Fast Tab:

Currency Code: USD

Lines Fast Tab:

Type: G/L Account (to make this as easy as possible)

No: 6120

Quantity: 10

Unit Of Measure: BT

Unit Price Excluding Tax: 100.00

Now, let’s go to Sales Invoice:

We see the total is 1,000 USD, which is what we want.

Before we post the invoice, let’s go back to the currency code field. You’ll see there’s an option box to the right of the field:

When we click, we see the Change Exchange Rate box:

This box tells us several things:

• The relational exchange rate is set to 1000. This is the rate we entered for 10/1/16 on exchange rates, not the rate of 1056 that was valid of as of 1/1/2016. This shows that posting date is driving our rate.
• We can see that the relational currency is our local currency of MXP. Relational currency is the currency NOT entered on the transaction but determined by the local currency for the company.
• We can see that we can update the relational exchange rate (1000) but not relational exchange rate (100). This explains the control from the currencies screen.
• A similar box appears next to currency code, and it functions in a similar way for journals.

Now, let’s post this invoice by clicking “post.”

We want to look at amounts in two places: first, Customer Ledger Entries and then General Ledger Entries.

Let’s set the filter to posting date 10/5/16:

(Note: Spotsmeyer had a “bill to” customer set up, so that’s the customer that shows up.)

Also, I’ve added a few columns to the screen: Amount($) and Remaining Amt($).

Let’s review the amount fields. Original Amount, Amount and Remaining Amount fields are all at 1150.00 USD. This is the original $1000 amount plus tax.

Amount($) and Remaining Amt($) are the amount in local currency (MXP), and you can see the rate is 1000 MXP for 100 USD (or 10 to 1). The “$” sign here is REALLY annoying—it means local currency and not U.S. Dollars. (Part of the reason I chose the Mexican company example was to make this point.)

Let’s take a look at General Ledger Entries as well:

In this case, Amount (without a $) refers to MXP, the amount recorded to the ledger, not the amount of the transaction. The original transaction currency is not stored on the ledger entry (but you can find it by navigating).

So there you have it! You now know how to enter a foreign currency invoice.

In our next post, I’ll show you how to revalue the value at month end and receive payment for it.