This article is relevant if you are looking to accept one foreign currency as payment for a customer invoice denominated in another currency.
During a recent NetSuite implementation for a fast growing US based company which sells its hot products worldwide, the Controller requested guidance on the following situation:
- The books are USD based.
- The customer invoice was denominated in Euros (EUR).
- A customer gave them British Pounds (GPB) to settle the transaction.
Leverage the Undeposited Funds Account
- Invoice (‚ā¨100): You demand¬†‚ā¨100 for selling a service to your client. ¬†This is foreign currency to you and it worth about $110.
- Payment (¬£84): ¬†She hands you¬†¬£84 and you agree to accept.
- Bank Deposit (¬£84): You then go to your bank and hand them ¬£84 and they accept without conversion fees because it is British Pound denominated.
- Step 1: Accept Payment: ¬†Go to the invoice and accept payment in full for¬†‚ā¨100 because you agreed it is 100% paid. ¬†Allow the cash account to go to Undeposited Funds.
- Step 2: Bank Deposit: Go to your GBP bank account and then find the payment you just accepted. ¬†Indicate that you received¬†¬£84 against this transaction. ¬†Commit your work.
Get More Care for NetSuite Operations
My goal here is to show a use case that is not well understood by the NetSuite community. ¬†My hope is this article helps streamline some of the practices currently being used in many accounting departments. ¬†If you are looking to work with a team of NetSuite experts, perhaps we can have a conversation.