We have a Functional currency of GBP
We purchase Inventory in USD
Say you purchase 1000 units at $1.50 and exch Rate is 1.5 it correctly shows 1000 items at a total value of £1000 when you print the Inventory movement stock control report
We then check the stock and 900 are found to be good so we invoice 900 and the inventory goes down by £900 leaving 100 units and £100 in Inventory
In the meantime time moves on and the exchange rate moves to 1.6
We then process a return for the 100 units
It returns 100 units removing them from Inventory but it calculates the $1.50 per unit at 1.60 saying we returned £93.75 worth of inventory.
AP is fine as it shows all the transactions in USD but the Inventory movement report shows zero units and £6.25 worth of charge. So now no goods now costs £6.25
This then requires a manual entry to write it off.
Surely a fully multi currency system should be able to handle this!
Please advise how soon this bug will get fixed
by: Ian A. | over a year ago | Financial Management
Comments
Not a bug. Accountancy rules say (paraphrasing) stock must be valued in reporting currency according to exchange rates at the date of transaction. So it is working correctly.
Sorry Steve
Please re read we get zero stock and a value - it cannot be correct!
Thinking this out further
IF we return items without linking to a receipt entry then the system should rightfully use the current month rate of exchange
But if you link it to a receipt from a previous period with a different exchange rate then the rate of exchange used should be the same as thethat of the original receipt.
After all
If the invoice also has VAT on it the VAT rules state a credit note has to be applied at the same rate of exchange as the invoice you cannot make a profit out of a different exchange rate
Accpac this needs urgent review as it currently also falls outside the VAT rules.
Ian
Having zero stock and a value is correct in certain circumstances. For example, you receive stock and sell all of it before the vendor invoice arrives. The invoice has a price difference than on the PO receipt. What happens to that cost difference? It has to go against the item cost, therefore you have zero stock with a value.
What you do with that variance is up to you - write off against cost, or incorporate in next receipt of same item.
Steve
Thanks for your input but we only receipt goods with a supplier invoice to hand.
In the current day and age an invoice can be sent around the world attached to an e mail in a atter of seconds - especially if you say without an invoice we will reject the stock and you will not be paid!
It works a treat
It also means we can have the "no negative inventory" ticked - you cannot have negative inventory - ever! (I suppose Anti-matter may be a possible negative stock item but that is not readily available
Sage
How about an answer on this - still causong problems and as usual no input from Sage
It does not work in compliance with the UK VAT laws
Should we request HMRC investigate and have you change the way it works and pick up the correct exchange rate ie that used on the day of the receipt?
We eagerly await your reply
Ian