FOREX in MYOB’s Account Right (Part 1)

 In Accounting Systems, Foreign Currency, Power BI

MYOB’s new Foreign Currency Functionality

For a lot of MYOB users out there, the release of the foreign exchange functionality in MYOB’s flagship product Account Right has been a long time in the making.

The new functionality provides users the ability to migrate away from the legacy “Classic” product which will become unsupported after September 2019.

Foreign currency is natively a complex matter to deal with in any accounting system. There are a lot of moving parts like the specific exchange rates when recording and realising sales or purchases and the requirement to show all values in your accounting system in one base currency.

Additionally, there is normally a profit or loss between these exchange rate timings so it’s understandable that the complexity has no doubt led to the delays in the best way to provide this feature for the end user. If you’re also using hedge contracts this further complicates the required accounting processes that you will find your accountant’s solution will need to cater for.

So here’s my first post on the new forex features (which is in beta mode as I write this article) and how it will work for business users needing this functionality.

The released version which I am testing (2018.3) allows functionality only for importers meaning that businesses needing to sell goods or services in a foreign currency will have to wait until later releases… this year or early next year hopefully.

Generally, you can enter supplier bills in a foreign denomination, foreign bank accounts and foreign currency spend money or receive money transactions.

The other matter to consider if you are on a legacy version of MYOB is that you cannot currently upgrade a legacy MYOB data file (known as the classic version like AccountRight v19.x) to the latest SQL version so you will need to re-key your trial balance and start fresh with the new format.

The way foreign currency works has also changed substantially.

The legacy version used an “exchange difference account” that allowed the full value of the foreign bank amounts to record non-base currency transactions. This automatically created another account in your chart of accounts to revalue the foreign bank transactions into to the base currency value of the foreign-held accounts.

On top of that, the accounts payable and receivable control accounts needed to also have a similar setup to convert those balance transactions in the base currency.

Thankfully this requirement is no longer needed and it was a really messy solution that made your chart of accounts a lot longer especially if you are dealing with multiple foreign currency transactions….but the good news is the MYOB developers have done away with this and the new process seems a lot more streamlined without the need of all these extra accounts.

So Lets set up a new Foreign Currency Bank Account

The first thing to do is set up a new bank account is a foreign currency.

Step 1 Enter your account number, name and choose your base currency. You will now see the account (2) shown in the list

 

Step 2 Now you have a foreign bank account lets spend some US dollars via the spend money option

To create a transaction on this account in the currency required, Select spend Money and choose the USD dollar bank account as shown below.

You will see the new window really provides all the information you require about the transaction in an easy to understand format.

You have the rate applied, the value in the foreign currency and the base currency conversion. This is really very useful the way it’s been designed compared to the previous versions.

Clicking on the rate (Item 3 shown above) will hyperlink you to Currency rate window and bring up the exchange rate details where you can modify the rate on the fly from the default one.

Press Edit and you can change the default or “Revert” will rekey the base currency rate used as the default in the Lists menu for currencies.

Click Okay and then Record on the spend money transaction and then you are done. Pretty simple to be honest.

The result is now output to your chart of accounts, notice that the bank account and the expense account are all displayed in the local base currency, AUD in this case.

An easy, neat and elegant solution with minimal requirements for additional accounts in your chart.

I have to say MYOB’s done a fantastic job revamping this functionality, it’s taken a while but well worth the wait!

Stay tuned, for more on this new feature when I will look at the Supplier and Customer Ledger workings for the new MYOB AccountRight 2018 foreign currency functionality.

If you haven’t already checked out Power BI and your an accountant I would strongly recommend you do a YouTube search to check out this fantastic tool that works really well with MYOB’s new platform.

The new foreign exchange feature is also available to access using MYOB’s API so it’s really useful for those of us with foreign currency matters in our accounting systems.

 

image courtesy of Rareclass via Creative commons license, some rights reserved.

 

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