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Projects:Exchangerateatdoclevel/Functional Documentation

Contents

Document sign-off

Role Name Sign-off date
Client SC Soft
GPS Salvador Zapata
PM Richard Morley

Document Status

Date Author or editor Description of change Document status Document version
June 6th, 2011 Patricia San Juan Document creation Draft 1.0
June 8th, 2011 Patricia San Juan Document ready for review and sign-off Final 1.0
June 10th, 2011 Patricia San Juan Document updated - Richard M. feedback Final 1.0

Objective

There are certain business scenarios which require to use a conversion rate because the document/s currency is not the same as the accounting schema currency/currencies.

There is currently a limitation in Openbravo that foreign currency documents can be entered and posted only using the central conversion rates defined at a system level.

However, there are certain business scenarios where an user of Openbravo may wish (or need) to use a different exchange rate (without changing the central conversion rate). Business scenarios include (but are not limited to):

The objective of this document is to describe a solution that will remove the existing limitation by allowing exchange rates to also be defined at a document level. This will enhance the process of entering and posting documents that are in a currency other than the system/accounting currency, allowing the use of an alternative exchange rate at a document leve.

This new feature is going to be developed as part of the Openbravo 3 Core and will be delivered through the corresponding MP.

Process Overview and Assumptions

There are several documents which are/can be involved in the accounting workflow:

  1. Invoices (sales/purchase)
  2. Payments (Payment In/Out)
  3. Financial Account transactions (Withdrawal/Deposit/Reconciliations)

The scope of this design assumes that a payment is made or received in the same currency as the invoice, however invoices&payments could be in a currency other than that of the accounting schema/s.

Having said that, a company could have:

At any point in time there may be a difference in the Openbravo system exchange rate and the exchange rate used in a document created by a third party on that same date,
therefore it is required to provide the ability (optional) to define exchange rates (document currency -> accounting schema currency exchange rates), for the documents listed below:

It should be possible to define for each document listed above as many exchange rates as accounting schemas.
In practice:

When processing/accounting a document, the system will look:

When reversing a document, the system must take into account:

Finally, it should be possible to either:

  1. entering the transactional currency amount (document currency amount) and the domestic currency amount (accounting schema currency amount), so that the exchange rate is deduced
  2. or entering the transactional currency amount and the exchange rate, so the domestic currency amount (accounting schema currency amount) is deduced.

Note:
Finally, it is important to remark that:

User Stories

Current behaviour

This section describes the current behaviour of the system where there is no need to vary the exchange rate, that means that the global exchange rate setup at system level is enough.

(This scenario would apply same way to sales).

A purchase invoice is received for USD 2675,00 on June 10th, 2011:

Account Debit Credit Calculation
Expense 3.275,00 2.500,00 * 1.31
Taxes 229.25 175,00 *1.31
Account payable 3.504,25 2.675,00 * 1.31
Account Debit Credit Calculation
Account Payable 3.504,25 2.675,00 * 1.31
In Transit Payment Account 3.504,25 2.675,00 * 1.31
Account Debit Credit Calculation
In Transit Payment Account 3.504,25 2.675,00 * 1.31
Withdrawn Payment Account 3.504,25 2.675,00 * 1.31

This is the simplest scenario as the currency conversion rate is fixed, therefore there are no currency gains/losses to deal with.

Proposed behaviour

This section describe how the system should behave for those cases where there is a need to vary the exchange rate, that means that the global exchange rate setup at system level is not enough.

(This scenario would apply same way to sales).

A purchase invoice is received for USD 2675,00 on June 10th, 2011:

Account Debit Credit Calculation
Expense 3.350,00 2.500,00 * 1.34
Taxes 234,50 175,00 *1.34
Account payable 3.584,50 2.675,00 * 1.34
Account Debit Credit Calculation
Account Payable 3.584,50 2.675,00 * 1.34
Currency Loss 107,00 3.691,50 -3 .584,50
In Transit Payment Account 3.691,50 2.675,00 * 1.38
Account Debit Credit Calculation
In Transit Payment Account 3.691,50 2.675,00 * 1.38
Withdrawn Payment Account 3.477,50 2.675,00 * 1.30
Currency Gain 214,00 3.691,50 - 3.477,50

This is the more complex scenario as the currency conversion rate is not fixed, therefore there are currency gains/losses to deal with.

System must take currency gain/loss accounts from the corresponding Accounting Schema, Defaults.
Therefore below "default" ledger accounts under the section "Bank" must be used:

Reversal Documents

In the case of voiding/reverting an invoice or a payment document, the system should behave as explained below:

Invoice reversal

An invoice already posted can be voided/reversed:

  1. by clicking on the "Reactivate" button and the choosing the action "Void". This process is going to create either a Reversed Purchase Invoice", in case of reversing an AP Invoice; or a "Reversed Sales Invoice", in case of reversing an AR Invoice.
    The exchange rate to be used while posting the "Reversed Purchase/Sales Invoice" must be exactly the same one as the one used while posting the AP/AR invoice.
  2. by creating either an "AP Credit Memo" or an "AR Credit Memo" and selecting the invoice being reversed in the "Reversed Invoice" tab.
    The exchange rate to be used while posting the "AP/AR Credit Memo" must be exactly the same one as the one used while posting the AP/AR invoice.
    It is out of the scope to reverse two invoices by the same AP/AR Credit Memo, in the case of a diferent exchange rate used while posting each invoice.
    Besides, there should be an invoice to be reversed selected in the "Reversed Invoice" tab, otherwise the exchange rate could be diferent and that should not be the case.
  3. by creating either a negative "AP Invoice" or a negative "AR Invoice" and selecting the invoice being reversed in the "Reversed Invoice" tab.
    The exchange rate to be used while posting the negative "AP/AR Invoice" must be exactly the same one as the one used while posting the AP/AR invoice.
    Besides, there should be an invoice to be reversed selected in the "Reversed Invoice" tab, otherwise the exchange rate could be diferent and that should not be the case..

Payment/Withdrawal/Deposit reversal

Above documents can be reversed once posted by cliking on the "Unpost" button.
The exchange rate to be used while un-posting any of above the documents must be exactly the same one as the one used while posting them.
Once reactivated, the process starts again.

User Interface changes

This project implies below user interface changes:

  1. Purchase Invoice: A new tab named "Exchange rates" is required, including below three new fields:
    Currency (Invoice currency)
    Accounting Currency (Accounting Schema currency)
    Exchange rate (Document currency -> Accounting Schema currency exchange rate)
    Total Amount (Document currency)
  2. Sales Invoice: A new tab named "Exchange rates" is required, including below three new fields:
    Currency (Invoice currency)
    Accounting Currency (Accounting Schema currency)
    Exchange rate (Document currency -> Accounting Schema currency exchange rate)
    Total Amount (Document currency)
  3. Payment In: A new tab named "Exchange rates" is required, including below three new fields:
    Currency (Payment currency)
    Accounting Currency (Accounting Schema currency)
    Exchange rate (Document currency -> Accounting Schema currency exchange rate)
    Total Amount (Document currency)
  4. Payment Out: A new tab named "Exchange rates" is required, including below three new fields:
    Currency (Payment currency)
    Accounting Currency (Accounting Schema currency)
    Exchange rate (Document currency -> Accounting Schema currency exchange rate)
    Total Amount (Document currency)
  5. Financial Account: A new tab named "Exchange rates" is required, including below three new fields:
    Currency (Deposit/Withdrawal currency)
    Accounting Currency (Accounting Schema currency)
    Exchange rate (Document currency -> Accounting Schema currency exchange rate)
    Total Amount (Document currency)

Design considerations

Issues

Please initiate a new discussion thread in the Forum for this project.

Remember that you will need to be logged in to the Openbravo Forge to do this.

All new discussion threads will be added to the Open Items list below by the Project Owner.

When it is agree in the Discussion Forum that it is closed (by the Functional Specification being updated, or the issue being deferred or rejected) then the link will be moved to Closed Items.

Open Items:

Closed Items:

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