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Purchasing in a Foreign Currency

Last updated 18/09/2019

Cin7 makes handling Foreign Currency Purchases simple and accurate. This article explains how to purchase in a foreign currency.

Making a Purchase Order in a Foreign Currency


By default new Purchase Orders use your base currency. To create a Purchase in a Foreign Currency:

  1. From the left navigation select Purchases, then click New Purchase Order.
  2. Enter the Company or Supplier/Vendor name.
  3. If the Supplier/Vendor has been assigned a cost option that is not the base currency, the currency will change automatically.
  4. Enter the products to be purchased in the grid below, and notice that the total is in the foreign currency.
  5. Enter an Estimated Time of Arrival (ETA), Port and ETD in the boxes provided and then click Approve.
We strongly recommend that you set up a supplier in the CRM module with the applicable cost tier prior to creating a foreign currency purchase order. 

Exchange Rates


As you can see, Cin7 uses an approximate exchange rate to convert the Purchase Order to your base currency. This provides a working rate until you pay your bill.

Once you have finalised payment:

  1. In the 'Indent Orders' boxes that appear when a foreign currency is added, enter the Deposit Paid (optional) and Final Payment in your base currency. This will be the exact amount debited from your bank account.
  2. Note that the exchange rate changes depending on the Deposit Paid and Final Payment that has been entered.

Implications for COGS


The following information only applies to those using the Perpetual Accounting Method.

COGS for Sales Orders are generated when items have been dispatched, and the order has been invoiced. In some situations you may sell and invoice goods you have received before you have paid for your Foreign Currency Purchase. This is completely fine provided the final payment in your base currency is entered within 6 weeks of the order being received. Cin7 will create initial COGS based on the approximate conversion, and then check for updates periodically for 6 weeks.

 

If you do not plan to have paid the invoice within the 6 week period, then we recommend entering the closest estimate possible to minimise the discrepancy.

FAQs

What currencies do you support?

Cin7 supports all major currencies and can add additional currencies upon request.

How is the approximate exchange rate calculated?

Our exchange rate is taken daily XE.com. We recommend that this rate is only used as an estimate - for greater accuracy see above.