Handling Exchange Rate Differences in Foreign Currency Accounts

365 business Banking avoids exchange rate differences when foreign currency invoices are paid through a bank account in the same currency.

Business Value

When companies use foreign currency accounts and post invoices in the corresponding foreign currency, Microsoft Dynamics 365 Business Central records exchange rate differences even though no actual currency exchange has taken place. This leads to discrepancies in financial reports that must be explained and corrected.

Feature Description

If Use Applied-to Exchange Rate is set to Applied-to Entry on the foreign currency bank account, the payment adopts the rate of the applied entry when you post from the Payment Reconciliation Journal or the General Journal. Invoice and payment then share the same rate, and no exchange rate difference arises. With the Fixed Exchange Rates action, you can also store fixed rates per bank account and per customer/vendor.

Details: Foreign currency settings