Fixing wrong exchange rates in invoices
This chat relates to an incorrect cost exchange rate due to NEOSYS not being locked on that field until mid 2006. However the incorrect cost exchange rate could have arisen through incorrect exchange rates on the currency file so the solution is still useful.
Chat:
Steve: media doing invoicing as well ... so who could check exch rate is correct before invoicing? to prevent this is future
Client: can they change the exchange rate
Steve: they can change the billing exchange rate to even now
Client: mmm
Steve: but I have recently stopped them from changeing the exchange rate to BASE currency
Client: k
Steve: there are two exchange rates ... one to the clients invoicing currency ... and one to our BASE currency
the first needs to be under their control ... and was and is ... but wouldnt cause this problem
the second one I decided a few months ago should not be under their control
the first part of the solution is for them to correct the schedule and reinvoice
the invoice will generate an entry with zero currency and xyz base currency
once posted, that will correct the original invoice
Client: ok
Steve: ... correct the erroneous effect of the original invoice
there after it is just a case of reversing these RV entries with a journal
thereafter ...
however I have to reopen the abillity of them to amend the "cost exchange rate" which is used as the exchange rate to base
open temporarily
how many schedules do they have to correct?
Client: 20-25
Steve: all iraq?
Client: ya
Steve: all done by people who are not totally skilled in usd invoicing probably
Client: to be very frank, its done by a person, who is very senior & experienced
another new guy did some, those were perfectly alright
Steve: i agree actually that it really is a mistake of neosys to allow the media people to change the "cost exchange rate"
I would call it a pitfall for them since there is no feedback to the media people about this exchange rate to make them feel pain if they get it wrong
if you bring up the schedule you will see the problem clearly
Client: let me see
Steve: pitfall ... ie a hole waiting for the unwary to fall it
if you look at the exchange rates on the right hand side
Client: how can they type 1 as exch rate
Steve: you will see TWO rates
Client: 1 in black 7 another in red
Steve: the top rate is the rate from the vehicle currency to the billing currency .. and the second is the rate from the vehicle currency to OUR BASE CURRENCY
Client: k
Steve: both come automatically actually
Client: ok
Steve: he must have had a brain storm and changed the second one to 1 ... not knowing what the effect was
Client: im just calling that person to check why he did it
Steve: anyway ... can we arrange a period of time for me to open the schedule for him to change the second line to the usual correct exchange rate?
Client: he will do it now
Steve: open the schedule file to ALLOW cost exchange rate amendment ... for an hour or so ... and close ASAP so other people dont change it on other schedules
Client: shd i do that
& how
Steve: open the schedule file to allow amendment?
only I can do that
Client: oh ok
can you open it now
will ask him to do the amendment
& let you know once he completes it
Steve: he has to agree a period to finish it I think
that invoice BTW only had USD on it so it is quite easy to put the correct exchange rate ... but he should confirm the exact exchange rate by looking at other schedules without this problem .. or by creating new dummy schedules and deleting them afterwards
Sent at 4:16 PM on Wednesday
Client: can he just change the exch rate & raise dr/cr note for the difference
Steve: yes
ONCE I reallow editing of that field
Client: will get back to you once he is ready to do modification
Steve: ok
Sent at 4:23 PM on Wednesday
Client: steve he is ready
can you please open it
Steve: ok and when to close it?
Client: 1 hr
Steve: ok one min pls
Sent at 4:35 PM on Wednesday
Client: steve is he supposed to correct both the rates
Steve: he can go ahead .. but press Ctrl+F5 in the schedule file or close ALL internet explorer windows and relogin to get the new schedule file
Client: one in black & 1 in red
Steve: ??
if he doesnt know yes what to do then I am worried
yes/yet
Client: steve, in anothert schedule, the exch rate in black is 1
Steve: you should do this in the test data to confirm that all it ok first please
Client: & the one in the bottom (red) is 0.2721088
Steve: the rates depend on what the vehicle currency and invoice currency to the client are
if the vehicle currency is the same as the invoicing currency then the black rate should be 1
Client: All rates are USD
& its a std rate
Steve: all vehicles are USD and all invoices are in USD?
Client: ya
Steve: great
Client: all vehicles & all invoices
Steve: black must be 1 and red must be 0.2721088 ... assuming that is right
Client: ya correct
Steve: I suggest that you correct all the schedules and let me close the option
Client: will the diff entry be passed automatically
Steve: the first part of the solution is for them to correct the schedule and reinvoice
the invoice will generate an entry with zero currency and xyz base currency
once posted, that will correct the original invoice
Steve: ... correct the erroneous effect of the original invoice
there after it is just a case of reversing these RV entries with a journal
thereafter ...
Client: ok
he is doing it
will let you know once he completes it
Steve: dont issue all the correcting invoices at once .. do one and check/post it
once you can correct one then you know how to correct all
Client: i checked one invoice
its ok
Steve: actually I think you cannot do the RV entry manually
RV reversal
Client: anyway let him raise the Invoice
Steve: after posting this invoice correction you are going to end with the client account a) a wrongly base-valued original invoice and b) a base currency only entry from the correcting "invoice" and c) a huge wrong RV entry from the allocation
the net effect is that the account is totally incorrectly valued in base currency
since this is an open item account and you cannot allocate base currency only entries to each other in NEOSYS user interface,
you cannot simply do a manual base currency only entry in the account to reverse the RV entry,
you need to use the NEOSYS revaluation program after posting the correcting "invoices"
and neosys will make an adjustment in the client account and reverse the entry in the exch/gain and loss account and allocate the adjustment to the correcting base currency only invoice.
Client: ok
Steve: is the bank account ok?
Client: ok
no probs in Bank a/c
Steve: after posting this correcting invoice there will still be a huge problem in the client a/c due to the RV on allocation .. but revaluation will clean the client account and reverse into gain/losses
so 1 BAD INVOICE plus 1 BAD RV less 1 CORRECTINGINVOICE less 1 REVALUATION = NICE AND CLEAN
Client: still cant understand one thing
oh ok got it
the RV entries are passed for the differencial amount
Steve: allocation is clever in that it automatically fixes the wrong entry in the client a/c ... but it cannot clean the income and cost side of the invoice ... therefore you end up with wrong base income/costs and a huge gain/loss
Client: betweenActual exch rate & 1
ok
Steve: allocation on payment values the entry in client account AT THE VALUE OF THE INVOICES BEING ALLOCATED/PAID OFF ... but it values the entry in the bank at the normal latest exchange rate
Client: ok
Steve: then, while currency between client and bank of course matches .. the base amounts do not .. so NEOSYS puts in an RV entry between CLIENT and GAIN/LOSS
nobody usually aware of how clever neosys is ... lol ... until things go wrong and you have to understand it all
Client: lol
Steve: ;-)
USD is fixed to you base currency so there should NEVER be any gain/loss on it
Client: exactly
Steve: only currencies where the invoices are valued at a different rate from the receipts due to changing rates over time should generate gain/loss ... obviously
Client: true
Steve: I suggest that you post all the correcting invoices and then wait until the next day and do a trial revaluation of the client in TESTDATA
Client: ok
Steve: NEOSYS revaluation process will unfortunately not allow you to see the journals that would be posted without actually posting them
Client: ok
