This question is related to this post: https://frontaccounting.com/punbb/viewtopic.php?id=2481
However, the mentioned question is related to correctly settling an invoice when the exchange rate is different during invoicing and payment. My problem is not the settling, that is correct.
I have tried to find other (more recent) posts on this subject, but I haven't found them.
The problem is this:
My company currency is USD
I have a customer in EUR
The Foreign Currency Exchange rate is different from the real exchange rate.
(This happens if you use a fixed Exchange rate throughout the year)
Say the EUR-USD exchange rate is 1.1 when I issue the invoice.
I invoice the customer for EUR 800,- = USD 880,-
My G/L Acounts Receivable is debited for USD 880,-
Now I receive the payment. But the exchange rate has changed to 0.987
The costumer deposits EUR 800,-
But I receive only USD 790,-
When I do a "Bank Account Payment Entry" I record this:
Payment received: USD 790,-
Settled A/R amount: EUR 800,-
After all, I want this invoice to be settled in full.
The result is the customer invoice is settled.
However, my Accounts Receivable G/L account is credited for only USD 790,-
Which leaves a balance on Accounts Receivable for USD 90,-
This is awkward, because at the end of the period I see Account Receivable: USD 90,-
When I go and look in the Report "Sales -> Customer and Sales Reports -> Customer Balances"
I see none of my customers has an open balance.
So I can't locate why Accounts Receivable has a positive balance as all customers paid in full.
This is all correct (it is not a bug).
But now I should adjust somehow my Accounts Receivable.
I need to make this entry:
Exchange Rate P&L: USD 90,- Debit
Accounts Receivable: USD 90,- Credit
Now the the Accounts Receivable is zero, which is correct.
And I have a loss on Exchange Rates, which is also correct.
I assumed the EUR to be worth more.
The error (if you want to call it like that) is made while entering the bank payment.
I receive USD 790,- and I settle an invoice of USD880,-
While based on the exchange rate I should have received USD 880,-
Question is There is a difference in the amount used for invoice settlement, and the amount booked on Accounts receivable. Why is this difference not booked automatically on "Exchange Rate P&L account".