Application Differences - Cashbook - Cashbook Transactions

Receipt and payment transactions can apply to base currency or foreign currency bank accounts. However, if a foreign currency bank account is used, then only that currency’s accounts (whether from the cashbook or sales/purchase accounts) can be entered during the analysis stage of the transaction.

If a base currency bank account is used, then any currency can be used in subsequent entries. Base currency entries work just the same as normal. For a foreign currency entry, however, the currency amount and the exchange rate are prompted in the usual way. Again, you can overwrite the prompted exchange rate to have the base currency value recalculated, or overwrite the base currency value to have the exchange rate adjusted.

Receiving/Paying a Currency Account in another Currency

This does occasionally happen, and the cashbook is a good place to handle it. You need an "internal” bank account, which is used as a device, and should never hold a balance. You then need to know the currency value being paid off from the account in question.In the example below, we have agreed to accept a payment of $17,500 against some invoices which total to €13,500.Our holding rates to sterling are $1.9129 and €1.4929 respectively.

Accordingly we enter a nil cashbook entry to our internal bank account, setting €13,500 against the sales ledger account — at €1.4929 this represents £9,042.80. We enter $17,500 against the US Dollar bank account into which we’ve paid the amount, only as a negative entry here to balance against the euro amount paid off.At $1.9129 this equates to £9,148.41.The difference of £105.61 we write off to exchange differences.