Credit Memos on Account
On account reconciliation of a T&M invoice can consist of reconciliation against both invoices on account and credit memos on account.
In this case, the exchange rate applied to the T&M entries on a zero invoice is the weighted average of the exchange rates of only the invoices on account being reconciled.
Example
In this example, you have a job using CAD as the company currency, and USD as the base currency. The job has a WIP amount of CAD 2,000.00 and a net on account amount of CAD 2,000.00. The job has been invoiced on account and credited on account and has one job registration (job entry), which is invoiced at 2,000.00 with on account reduction 2,000.00.
| Entry | USD | CAD | Exchange rate |
|---|---|---|---|
| Invoice on account | 1,562.69 | 2,100.00 | 74.414000 |
| Credit memo on account | 74.05 | 100.00 | 74.053000 |
| Job registration (e.g. vendor invoice) | 1,525.21 | 2.000.00 | 76.260500 |
| 0-invoice | 1,488.28 | 2.000.00 | 74.414000 |
| Exchange rate variance | 0.36 | 0.00 | - |
The exchange rate variance of the zero invoice comes from the reconciliation of CAD 100.00 of the CAD 2,100.00 invoiced on account against the credit memo on account, that is:
74.41: 74.05 = 0.36