Taking payment in a different currency than the cash purchase

What this does

A cash purchase recorded in one currency (e.g., USD from a foreign supplier) can be paid in a different currency (e.g., your home currency AFN). Usystems converts the payment to the supplier's currency using an exchange rate. This is necessary when suppliers invoice in their local currency but you must pay in yours, or when you have currency trading flexibility.

Before you start

• You have the ability to create cash purchases.
• You know the supplier's currency and the currency of the payment account you will use.
• You have an up-to-date exchange rate, or you trust Usystems to use the system-wide rate.
• The payment account you plan to use supports the currency you intend to pay in.

Steps

1. Open a new cash purchase form. Navigate to Purchases → New Cash Purchase Open in Usystems.

2. Select the supplier and add items. The form may show the supplier's default currency (e.g., USD).

3. Add all line items, discounts, and taxes. The purchase subtotal displays in the supplier's currency.

4. Scroll to the Payment Information section.

5. In the Payment Account field, select an account in the currency you want to use for payment. For example, if you want to pay in AFN, select a bank account denominated in AFN.

6. The form now displays two amounts:

   • Purchase Amount (in supplier's currency, e.g., 5,000 USD)
   • Payment Amount (in your payment currency, e.g., 425,000 AFN)

7. If an Exchange Rate field is visible, verify the rate:

   • The system may display the current system-wide rate (e.g., 1 USD = 85 AFN).
   • If you need a different rate, edit the field with the correct rate.
   • The payment amount recalculates automatically.

8. Review the summary and confirm the payment currency is correct.

9. Save the purchase.

Accounting impact

When you record a cash purchase in one currency and pay in another:

• Inventory (or Cost of Goods Purchased) is debited in the supplier's currency.
• Accounts Payable (or Cash) is credited in the payment currency.
• A Foreign Exchange Gain or Loss account records the difference between the rate used at purchase time and any actual settlement rate (if different).
• The exchange gain or loss is typically recognized when the payment is finally settled.

Tips & common mistakes

• Lock the rate early: The exchange rate used at purchase creation is recorded in Usystems. If rates fluctuate, the recorded rate does not change. Decide on a rate lock strategy with your finance team (e.g., lock at order, lock at invoice, lock at payment).
• Real vs. system rate: The "system-wide rate" is often an average or a rate set by your admin. If you negotiate a better rate with your bank, override the system rate with your actual rate.
• Verify the payment currency: Double-check that the payment account currency matches your intent. Selecting the wrong account can cause unnecessary exchanges or reconciliation issues.
• Document the rate: If you use a non-standard rate, make a note in the purchase memo or reference for audit trail and future reconciliation.
• Avoid repeated conversions: If possible, arrange with your supplier to invoice and accept payment in the same currency to avoid conversion fees and rate uncertainty.
• Partial payments: If you pay the supplier in installments over time, each payment may have a different rate, creating multiple gains or losses.