Foreign Currency Gains and Losses in Microsoft Business Central – Part 1

Dynamics 365 Business Central

Businesses using Microsoft Business Central must manage foreign currency gains and losses due to changes in exchange rates between transaction and settlement/reporting.
The blog explains how to create sales invoices and payment receipts in foreign currency in Dynamics 365 Business Central.
Understanding foreign currency transactions, setting up realized and unrealized gains and losses accounts, and defining exchange rates are crucial for accurate financial reporting.
Setting up codes for each currency used, recording transactions in local currency and reporting currency, and editing the Currency Card for G/L Account No. are necessary steps.
Exchange rates are used to calculate the local currency value of each currency transaction, with an example using USD as the foreign currency.
The process of creating a sales invoice in USD currency and posting it on 01.06.2024 with a specific exchange rate is detailed.
Reviewing general ledger entries for the posted sales invoice and bank receipt entry, as well as applying the bank receipt entry against the sales invoice, is essential for tracking gains and losses.
Managing foreign currency transactions in Dynamics 365 Business Central is vital for accurate financial reporting, and the article hints at a follow-up on executing the Adjust Exchange Rates Batch Job in Part 2.

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