Issue:
How do we purchase US goods but retain accurate margins using CAD?
Resolution:
In order to keep profit margins accurate and to utilize the margin maker tool, you should enter all item costs in Canadian dollars. By keeping the costs in Canadian dollars, this will show the true cost on your sales reports such as the Money Tree.
In order to account for the currency difference, we have provided you with the steps below.
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Create all items to be ordered from US vendors in Canadian dollar amounts
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Create all POs to US vendors using Canadian dollar amounts
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Enter all invoices from US Vendors in US dollar amounts
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Attach inventory items from the Apply Inventory Items.
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There will be a cost variance due to the exchange rate. Click on the [Apply Cost Variance] button, which will send the amount to the Apply Accounts Tab.
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On the Apply Accounts tab, double click the Cost Variance entry so you can edit the entry.
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Select the GL account you use for tracking the exchange rate.
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Click Save to complete the entry OR you can forgo clicking on the cost variance button and simply go to the accounts tab and enter the GL account for the exchange rate.
You will need to talk consult your accounting person and/or CPA about creating a new general ledger expense account to use for posting the exchange rate. This account will then allow you to track these dollars separately year over year.