Note: This functionality was added to support the transition to the euro. Your enterprise needs to implement its own procedures to ensure that it adheres to current accounting practices regarding fixed-rate currencies. For example, you should implement procedures so you do not issue payments in EMU national currency units after January 1, 2002.
If you enter an invoice in a fixed currency, such as euro or another European Monetary Union (EMU) currency, you can pay the invoice in an associated fixed-rate currency. Payables automatically defaults EMU Fixed as the payment exchange rate type.
In addition, if your ledger currency has a predefined fixed exchange rate with the invoice currency or payment currency, Payables defaults EMU Fixed as the exchange rate and provides the fixed rate as the default exchange rate.
We use the following terminology in this discussion:
EMU Currencies: The euro and the national currency of each state in the EMU.
NCU: National Currency Unit. Any EMU currency other than the euro.
In the Invoice Workbench, when an invoice requires an exchange rate between an NCU currency and a non-EMU currency, you enter only the exchange rate between the non-EMU currency and the euro. Since the rate between the euro and each NCU is fixed, the system then calculates and displays the complete exchange rate between the NCU and the non-EMU currency. This functionality is enabled when the following profile option is set to no: Currency: Allow Direct EMU/Non-EMU User Rates.
Three fields in the Invoice Workbench support the calculation of exchange rates. When you enter an invoice currency that requires an exchange rate between a non-EMU currency and an NCU, the behavior of these three fields changes:
The first field becomes enterable and you enter the exchange rate between the euro and the non-EMU currency in it.
The second field remains display-only, and it displays the fixed exchange rate between the euro and the NCU currency.
The Exchange Rate field becomes display-only and displays the calculated exchange rate between the NCU and the non-EMU currency.
Payables dynamically builds the prompts for the two new fields based on the ledger currency of your ledger, the profile option setting for Display Inverse Rate, and the invoice currency of the current record. The prompt will change depending on which invoice record your cursor is on.
The following table shows examples of how the field prompts appear in different scenarios.
| Ledger | Invoice Currency | Use Inverse Rates option | Field Prompt 1 | Field Prompt 2 | Field Prompt 3 |
|---|---|---|---|---|---|
| USD | NCU | Y | USD to EUR | EUR to NCU | Exchange Rate |
| USD | NCU | N | EUR to USD | EUR to NCU | Exchange Rate |
| NCU | USD | Y | EUR to USD | EUR to NCU | Exchange Rate |
| NCU | USD | N | USD to EUR | EUR to NCU | Exchange Rate |
Note: Because the Invoice Workbench dynamically builds the labels for the two new fields, you should not update the field prompt names for these fields. Online, "NCU" would be replaced with the currency code for the NCU you are using.
To pay an invoice in a different fixed-rate currency, whether the invoice originates in the Invoices window, Oracle e-Commerce Gateway, Quick Invoices Expense Reports window, or Recurring Invoices window, you need to specify the Payment Currency.
Assign fixed rates to currencies in the Currencies window. Currencies Window.
Assign daily rates between your ledger currency and the Euro. Entering Daily Rates.
In the Supplier Sites window enter the default Invoice Currency and Payment Currency you want to use for each supplier site. (Optional)
In the Currency region of the Payables Options window, enter your Rounding Errors Account. See: Currency Payables Options.
Define a Suspense Account for your ledger in the Suspense Accounts window in General Ledger. Enter a source of Payables. See: Defining Suspense Accounts.
When you enter invoice information, enter an associated fixed rate currency as the Payment Currency. For example, you can enter an EMU currency as the Invoice Currency, and euro as the Payment Currency. Enter the cross rate date or accept the default. Payables provides the fixed rate, the rate type of EMU Fixed, and the default rate date. You can override the rate date.
All scheduled payments will be created in the payment currency.
You can change the invoice payment currency at any time before paying the invoice. If you change the payment currency, Payables will automatically recalculate the scheduled payments in the new payment currency.
When you pay the invoice, use a bank account that uses the payment currency or use a multi-currency bank account.