Invoice to cash in a foreign currency

Step by step

1. Invoice AR Clerk

   AR Clerk raises the invoice with its customer, currency, due date, revenue account, cost centre and tax treatment. Credit checking uses the customer’s limit currency. Tax Specialist maintains the configured jurisdiction rules; any authority-prescribed conversion is retained separately from the accounting rate.

   • Updates Invoices, Invoice items, Contacts

2. Post and send AR Clerk

   AR Clerk posts using the approved document-date spot or contract rate. The journal records receivable, revenue and tax in functional currency. Missing or overridden rates follow the exception controls before posting. The invoice keeps the rate used; sending it is a separate delivery step.

   • Updates Invoices, Journal entries

3. Collect AR Clerk

   AR Clerk reviews aging and disputed balances. Configured dunning rules determine reminders and escalation; disputed invoices remain excluded. The original invoice-currency balance does not change merely because exchange rates move. Exposure reporting distinguishes current conversion from the ledger’s carrying value.

   • Updates Invoices

4. Receive AR Clerk

   AR Clerk records the money received on a bank account in that currency, from a validated statement line or manual entry. Receipt posts bank debit and unapplied-cash credit immediately. Customer identification and allocation may follow later; neither delays recognition of the cash movement.

   • Updates Payments received, Bank statement lines, Journal entries

5. Apply AR Clerk

   AR Clerk confirms proposed applications. Each line records the invoice amount settled, cash consumed in receipt currency, the conversion between them and any withholding in invoice currency. It clears the receipt’s allocated current unapplied carrying value plus withholding receivable against the invoice’s current carrying amount. The residual is realised FX; allocated revaluation adjustments are released from item tracking without a second gain or loss.

   • Updates Payments received, Payment applications, Invoices, Revaluation items, Revaluation settlements, Journal entries
   ApprovalA person approves before the work moves on.

6. Credit and write-off AR Clerk or Controller

   An AR Clerk other than the preparer approves credit memos within their authority; Controller approves credits above that limit and every write-off. The comparison uses a recorded amount converted into the decision-maker’s limit currency. Credit, reversal and write-off evidence stays linked to the original invoice; delegation does not bypass authority or conflict checks.

   • Updates Invoices, Credit applications, Approval decisions, Journal entries
   ApprovalA person approves before the work moves on.

AR Clerk

Raises invoices, records receipts, confirms applications and approves credits within authority.

Controller

Approves above-limit credits and every write-off.

Treasury Analyst

Resolves rate issues.

Tax Specialist

Reviews tax treatment.

Auditor

Reads settlement and revaluation evidence.