Introduction |
This program enables you to enter, amend, and report on cash book transactions batches. The normal procedure for entering batches involves three stages: § Enter the batch and its transactions. A batch must be for a single cash book, company, and financial period. As you enter the transactions Cash Manager updates the cash book balances. |
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§ Print the batch, check all the details, and make any necessary amendments. |
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§ If it is a cheque-printing batch, print the cheques. |
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§ When you are satisfied that all the details are correct, print the cheques if it is a cheque printing batch, and then close the batch. Cash Manager checks that the General Ledger dissections are complete before it marks the batch as closed. Apart from amending and confirming unconfirmed currency information of foreign currency transactions, you cannot change a batch after it is closed, nor can you print or reprint its cheques. |
Currencies |
Cash book balances are maintained in both the cash book currency and the company's base currency. However you can enter transactions in any other currency that is defined in Administration Parameters. The currency you enter a transaction in is referred to in this manual as the 'entry currency'. |
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When the entry currency differs from the cash book currency, Cash Manager calculates the value in cash book currency using the house exchange rates in force on the transaction date. Similarly, when the entry currency differs from base currency, Cash Manager calculates the value in base currency using the house exchange rates in force on the transaction date. You can view details of the exchange rates involved in either conversion via the Currency Information Window. If any of the exchange rates involved in a conversion are variable, you can enter a spot rate for the transaction, or a specific value in cash book or base currency. |
Exchange gain/loss |
When a cash book contains funds valued at a different exchange rate from that selected for a transaction, in certain circumstances Cash Manager automatically generates an exchange gain/loss posting. Cash Manager does this if the transaction would otherwise result in: § The cash book balance being zero in one currency, but not in the other. |
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§ The cash book balance being negative in one currency but not the other. |
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The exchange gain/loss posting is the difference between the base value at the actual rate and the average rate for the cash book. The average rate is calculated from the currency and base balances. The exchange gain/loss posting is analysed to dissection code EP (Exchange payments) or ER (Exchange receipts) as appropriate. Cash Manager automatically creates these dissection codes when they are needed. |
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If you always revalue bank accounts to the latest rate when you change rates, and then use the standard rate for all transactions, exchange gain/loss postings do not arise. |
Example 1 |
In this example there is no exchange gain/loss. Pay $150 (valued at £100) into a $ cash book with balance $150 valued at £95. $ balance = $150 + $150 = $300 £ balance = £95 + £100 = £195 |
Example 2 |
In this example, without an exchange gain/loss adjustment, the transaction would result in a cash book balance of $0 being worth £5. Pay $150 (valued at £100) into a $ cash book with balance $150 valued at £105. |
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The £ value is calculated using the average rate represented by the funds in the account (i.e. 150 * 105/150 = 105). £100 of this is analysed to the transaction's dissection codes; the exchange gain/loss of £5 (£105-100) is analysed to Exchange Receipts. |
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$ balance = -$150 + $150 = $0 £ balance = -£105 + £105 = £0 |
Example 3 |
In this example, without an exchange gain/loss posting, the transaction would result in $6 being worth £5. Pay $300 (valued at £200) into a $ cash book containing -$294 valued at £205. The £ value posted is £209 calculated as follows: $294 at average rate = £205 $6 at actual rate = £4 |
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Of the £209, £200 is analysed to the transaction's dissection codes, £9 to Exchange Receipts. $ balance = -$294 + $300 = $6 £ balance = -£205 + £209 = £4 |