Once currencies and exchange rates have been created, prices, orders, invoices, payments, contacts and bank accounts can be managed in those currencies.
Brightpearl accounting will record the foreign currency transaction values and also the converted base currency values for financial reporting.
How to add a currency
- Go to Settings > Company > Currencies
- Click the Add currency button
- Select the currency
- Enter the currency symbol
- Select the exchange rate variance account code
- Enter the currency exchange rate (in relation to the base currency)
- Click Save
Exchange rate variances
Brightpearl automatically accounts for exchange rate gains and losses to ensure both the foreign currency and base currency accounting remains in balance.
Gains and losses can occur when a different exchange rate is used for an invoice than the payments received.
When an invoice is raised in a foreign currency, it also has a base currency value and when the invoice is paid, both the foreign currency and base currency values must be cleared. Where the same exchange rate is used the invoice and payment match in both base and foreign currency and are therefore both cleared.
However, if the exchange rate is no longer the same as the invoice, a discrepancy will be noted.
Where the full foreign currency balance has been cleared then the base currency balance must also be cleared. To do this Brightpearl automatically creates an adjustment for gains/losses, posted to the exchange rate variance accounted set against the currency.
Managing exchange rates
Brightpearl exchange rates need to be manually added and updated.
The current exchange rate for a currency will be automatically used for new transactions, but can be manually overridden on the transaction where required.
An exchange rate is assigned an active date to specify when it automatically comes into play, allowing future exchange rates to be created and automatically used as of that date.
A full history of the exchange rates is retained for each currency.
How to set exchange rates
- Go to Settings > Company > Exchange rates
- Click Add rate
- Select the currency and enter the date and rate
- Save the new rate