Working With Foreign Currency Bank Accounts
Once you establish a relationship with a vendor or customer that uses a different currency, you should consider how you will compare prices between the two currencies. Unless you open a foreign currency bank account, you will likely have to convert from one currency to the other every time you buy or sell goods. Not only does this process take time, but it also exposes you to unexpected jumps in currency exchange rates. Plus, you must also pay exchange fees and wire transfer fees when you pay with your home currency bank account.
Opening a foreign currency bank account simplifies your transactions with foreign vendors and customers by working in that one specific currency.
Example
When you receive an invoice from a foreign vendor, you can pay them the exact price written on the invoice. And because the bank account from which you pay the invoice is always the same currency, you do not pay for conversion, the exchange rate never fluctuates, and you can write a cheque from your account instead of having to transfer funds or buy a money order.
Note: We recommend that you set up at least one bank account to keep track of transactions for each foreign currency you have set up.
To add foreign currency bank accounts:
If your data is already configured to use foreign currencies, you can add a foreign currency bank account and follow the rest of the steps for configuring your inventory items and services, customers, and vendors.
Note: If you have not yet set up foreign currencies, you should start here.
- In the Home window, click the Accounts icon.
- In
the Chart of Accounts, select (highlight) an existing bank account, and
then on the toolbar, click the Create
button.
- Sage 50 Accounting will automatically assign a number to this account; to change it, type over the number, then enter a name for this account.
- Click the Account tab and select Subgroup Account.
- Click the Class Options tab and select Bank for the account class. Select the type of currency used for this bank account and enter any other information you need.
- Close the window: your record will be automatically added.