How to convert credit to a different currency

This document has been deprecated. Openbravo allows now to have a given currency assigned to a business partner (i.e. USD) while business partner price list is defined in another currency (i.e. EUR). "Set New Currency" process allows to do that. For additional information please visit this Set New Currency.

Introduction

If a Business Partner has already generated Credit, it will not be possible to change it's default Price List to another with a different Currency. In this case, it is necessary to consume this Credit first. And it can be generated afterwards in the Currency of the newly selected Price List. In order to do so, being consistent with the accounting, the recommendation is to:

• Create a Payment against a G/L Item that consumes the existing Credit.
• Change the Price List.
• Create a Payment against the same G/L Item that generates the Credit again in the Currency of the newly selected Price List.

By following these steps, the difference between amounts created when Converting from one Currency to another is Posted against this G/L Item.

Steps

This is a more detailed example of the previous steps, that can be used as a guide when dealing with this scenario:

Introduction. There is a Business Partner that has already generated Credit in USD. This is the Journal Entry of the Payment that generated the Credit:

1. Create a Payment that consumes the available Credit. In this example, the Business Partner is a Customer, therefore, a new Payment In is going to be created to consume the available Credit.
Also, in this example a new G/L Item named Currency Conversion has been created previously, with GL Item debit Account and GL Item credit Account set with 8255 - Currency Balancing. For more information on G/L Items, visit G/L Item
- In Payment In Window, create a new record for the Business Partner and click on Add Details button.
- In Transaction Type select GL Items.
- Actual Payment In: The same amount as Available credit.
- Check the "Use Available Credit" checkbox.
- GL Item. In this example, Currency Conversion.
- Received In: The same amount as Available Credit.
- Click on Add Button.
- Check the "Refund to Customer" checkbox.
- Click on Process.

By doing so, two Payments have been generated, one that refunds the Credit to the Customer, and one against the GL/Item. With the following Journal Entries:

2. Change the default Price List of the Business Partner In the Business Partner Window, in the Customer tab (or in the Vendor tab if the Business Partner is a Vendor), change the default Price List. In this example, the new Price List is defined using EUR as Currency.

3. Create a Payment that generates the Credit again In the Payment In Window, create a new record for the Business Partner and click on Add Details button.
- In Transaction Type select GL Items.
- Actual Payment In: 0.00
- GL Item. In this example, Currency Conversion.
- Received In: The amount that is going to be left as Credit, but in the opposite sign, in this example -1250.00 (Since in this example, converting 1000.00 USD into EUR results in 1250.00 EUR)
- Click on Add Button.
- Check the "Leave this amount to be used later" checkbox.
- Click on Process.

The last Payment has generated the following Journal Entry:

Conclusion. After following the previous steps, this is the Journal Entry of the Currency balancing G/L Item in USD. Notice that the 1250.00 EUR that has generated credit are converted correctly into 1000.00 USD.

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