Currency and rates
Lim & Co has a main currency for its organisation, while an individual quotation or invoice can use another document currency. An exchange rate relates the document amount to the main currency.
Why it works this way
Section titled “Why it works this way”The document currency states what the customer is quoted or charged. The main currency provides a consistent measure across the organisation’s records.
A document in the main currency needs no foreign-currency conversion. A foreign-currency document needs an available exchange rate before its converted value can be calculated.
easySales identifies the source and effective date of an available rate. A draft invoice can use an updated rate, but issue freezes the invoice’s effective exchange rate with its other financial facts.
An invoice raised from a quotation is a new financial record. Its rate is determined for the invoice rather than treating the quotation’s earlier conversion as permanently fixed.
How it relates
Section titled “How it relates”Currency belongs to the quotation or invoice, while the exchange rate explains its value in the organisation’s main currency. The document’s line items and tax then produce totals in that document currency.
If Lim & Co later issues a credit note, the credit uses the source invoice’s effective rate. This keeps the correction aligned with the charge it reduces.
- Main currency: The organisation’s common currency for measuring records.
- Document currency: The currency shown and charged on one quotation, invoice or credit note.
- Exchange rate: The conversion relationship between a document currency and the main currency.
- Effective date: The date associated with the rate used.
- Frozen rate: The rate retained by an issued invoice.
Common misunderstandings
Section titled “Common misunderstandings”- Changing a current exchange rate does not rewrite the rate on an issued invoice.
- A foreign-currency quotation and its later invoice are separate records and need not use the same rate.
- Document currency does not replace the organisation’s main currency.
Where to find it
Section titled “Where to find it”Currency is one of the facts carried through the quotation and invoice relationship. Its invoice value becomes fixed at the issue boundary.