QuickBooks Asia

Adjustment amount disappear from Credits Used column

In some of the foreign currency transaction such as applying an adjustment amount (Credit Note) to a Bill, the Credit amount disappeared from the Credit Used column. Besides, the Pay Selected Bill button was grey off.

Scenario:

Software used: QuickBooks Enterprise 2009/10 Asia version

Home Currency: USD

Exchange Rate:  0.14972 Chinese Yuan Renminbi : US$1

01 Nov 2010, create a payment via Write Cheque to Supplier A (as a deposit) for the amount of Y59,570.00 (Renminbi). Since this was a deposit, the account used will be Accounts Payable – RB (Currency = Chinese Yuan Renminbi).

10 Nov 2010, received Bill from Supplier A, Bill amount was Y59,570.00; enter the Bill with item as per normal.

Since this Bill was already ‘paid’ earlier, you are required to knock off so that it will not show as an outstanding bill. To do it, simply do a Pay Bill to Supplier A.  In the Pay Bill window, select your bill to pay, click the Set Credit button and select the Payment which you did earlier.

Problem …

After you have selected this Payment from the Set Credit sub-window, the credit amount does not show up in the Credit Used column, besides, the Pay Selected Bill button was grey off.

It seems to be a bug in the default Chinese Yuan Renminbi currency. I did a test, when the amount was less than Y5,000.00, the bill can be knocked off by Set Credit method. However, any amount greater than that will have an error.

To resolve it, I created a new Chinese Yuan Renminbi currency in the currency list (I named it as RB, it can be any prefer name). Next, I created a new Accounts Payable account (I named it as AP-RB) and link it to this currency; all the supplier or customers that require trading in Renminbi will link to this currency too.

Now, when I created a Payment and Bill with this newly created currency, I can knock it off by using Set Credit method without any problem. 

 

How QuickBooks multicurrency works for items

In QuickBooks, there are only three types of accounts can be set in Foreign Currency. They are Bank, Accounts Receivable and Accounts Payable account type.

If your home currency is in Singapore Dollar, all accounts (except Bank, Accounts Receivable and Accounts Payable account, which can be set in foreign currency) will be in Singapore Dollar.

How does the system work?

 

When your home currency is in Singapore Dollar (SGD), your inventory assets price and inventory value-on-hand will be in SGD. 

Example:

    Exchange Rate: 

        Euro 1 : S$1.80

        US$1 : S$1.40

    Bill Received: 100 pcs of item 1 from Supplier A at Euro 100 each.

    Invoiced: 30 pcs of item 1 to Customer B at US$190.00 each

When Entering Bill from Supplier A for 100 pcs x Euro 100 = Euro 10,000.00, the double entry will be:

    Debiting Inventory Assets account: 100 pcs x Euro 100 =  S$18,000.00 

    (i.e. Euro 10,000.00 x 1.8)

    Crediting Accounts Payable: S$18,000.00 (Euro 10,000.00)

QuickBooks will convert from the Euro Bill into Inventory Assets account as a SGD amount.

When creating Invoice to Customer B for 30 pcs x US$190.00 = US$5,700.00, the double entry will be:

    Debiting Accounts Receivable: 30 pcs x US$190.00 = S$7,980.00 (US$5,700.00 x 1.4)

    Crediting Sales account: S$7,980.00

    Debiting Cost of Goods Sold account: 30 pcs x S$180.00 = S$5,400.00

    Crediting Inventory Assets account: S$5,400.00

The Average Cost in QuickBooks item will always in SGD (home currency). 

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If I made a mistake in the Exchange Rate, can I edit it in my transaction?

When you create transaction, such as invoices or bills, you should follow your monthly house rate. Monthly, Accountant has to set the Exchange rate in QuickBooks, so the rest of the users can use the same rate for all the transactions. 

Hence, when you wrongly used an exchange rate for a transaction, you should consider doing a reverse journal to revert out the transaction. This is a proper way of keeping the book; you should not edit a transaction after posting. 

Although QuickBooks does provide you with a feature to edit your pass transactions, Audit Trail will capture these changes; thus, Auditor may question you for those editing and deleting made to your book. Besides, this may cause confusion to the Auditor at the later stage. 

What are those things that you need to watch out for if you edited your transaction?

Common problem am seeing are when your foreign invoice has a GST associated to an item, sometime the GST amount (home currency) does not refresh automatically in the reports. After you edited your transaction, check your reports.

To update your reports, simple refresh either your item or the GST code. To refresh the item or GST code, simply deselect your code and reselect it again. These will help to recalculate the GST amount in your transaction.

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How can I turn on the multi-currency feature in QuickBooks?

I had a client told me that she just bought a QuickBooks Pro 2009/10 (Asia) edition. The retail box stated it has multi-currency feature, but when she created a new QuickBooks company file, the new QuickBooks Company file does not have the multi-currency feature. What could have gone wrong?

QuickBooks’ Easy-Step Interview does have a question on whether you like to turn on the multi-currency feature, but if you have missed the step, by default, QuickBooks will not turn on the multi-currency feature in your new company file.

So, how can you turn on the multi-currency feature manually?

From the Edit menu, select Preferences, in the Preference window scroll to the Accounting Preference icon and click on the Company Preferences tab. Under the Company Preferences tab, you check the check box for “Use Multicurrency” and set the Home Currency accordingly.

You need to check with your Auditor on what home currency should be set in your accounting software. If you audit your file base on Singapore dollar, then, your home currency in QuickBooks should be set as Singapore dollar.

For QuickBooks US version, the multi-currency feature is under the Multi-Currency Preference icon.

One last thing, before you turn on the multi-currency feature, I suggest you do a back up. You cannot roll back once the multi-currency feature is being turn on.