How do I apply a payment to a Foreign Currency Invoice?

MYOB Advanced allows you to record transactions in any currency. This process guide will show you how to, receipt a payment against a Foreign Currency (FC) invoice in the local currency, receipt the payment into a FC account, apply a bank charge

For the purposes of the example we will use the following customer record. Note the customer is set up with USD currency and has no balance to start with:

Next we will record an invoice against the customer:

This invoice will post a journal as follows:

And in local currency:

Recording the Payment

1. To record the payment, go to Finance > Accounts Receivable > Payments and Applications
   
2. On the payment screen select the customer, and then the Payment type and Bank Account
   
3. In the Payment Amount box enter the amount of the payment received in the currency of the Bank Account (in this case AUD)
4. In the Documents to apply tab, add a row and select the invoice that you are applying the payment to
5. In the amount paid you should fill in the amount as the amount applied in the local currency of the bank account, then calculate and enter the “Cross Rate”
   1. The Cross Rate is calculated as the Local Amount (AUD) Divided by the FC Amount (USD)
      
6. In the example above you can see that the payment of AUD $14,102 is being applied to the invoice of $11,000 USD and leave no balance. This is due to the cross rate of 1.282 matching these exactly.
7. On release you can see that the posting will clear the Accounts Receivable and apply a Realised Gain/Loss amount for the variance
   

The balance on the customer at the end of processing is $0 as expected

Applying a Bank Fee

1. To apply a bank fee for the transaction, follow the same steps as above with the following differences
   
2. On the payment step go to the Finance Charges tab and add a row for the Bank Charges

Note this step requires the setup of “Entry Types” that determine how this charge will be applied.

1. Release the payment as per the previous process and you will notice the journal will include the extra deduction of the finance charge from your account:
   

Setting up entry types

Entry types are set up from the Finance > Cash Management > Setup Entry Types (CA203000)

You can add any required types here and in particular note the “Deduct from Payment” column. If selected this will deduct the charge amount from your payment initially, leaving less balance to apply to documents, rather than showing it as a separate journal as per the last example.

To make your entry types visible to be used on transactions they must be allocated to the Cash Account. This is done as follows:

1. Navigate to Finance > Cash Management > Manage > Cash Accounts (CA202000)
   
2. Select the Cash Account
3. Go to the Entry Types Tab
4. Add the new type