[GNC] How to regularly use two currencies

[Norbert Klein]

Thanks, Geert,

for you clear and specific suggestions.

I think they will result in what I need - I will try to implement it and 
will let you (and gnucash-user at gnucash.org) know after some days.

There will be - as far as I can see now - only one additional procedure 
necessary (and a short additional time) for every shop action: to do the 
transaction from Riel to US$. But that is OK if all the other results 
will be what we need.

Thanks again for thinking through our special Cambodian "regularly two 
currencies" situation.

Norbert

=


On 30.6.2018 17:56, Geert Janssens wrote:
> Hi Norbert,
>
> While you seem to think you want to account in multiple currencies, your
> replies so far all suggest you only want to track payments in multiple
> currencies.
>
> I read these requirements:
> Quote 1:
> "I have to know - at the end of the  day - how many US$, and how many Riel,
> should be in the cash boxes."
> Quote 2:
> "But while I have to keep track of the actual cash in the cash boxes, at
> certain times (daily, weekly, monthly etc.) I also need to know "how we did as
> a business" and this should say something in US$ (for all the activities which
> did happen in both currencies)."
>
> So essentially this says you want to keep track of two cash boxes: one in US$
> and one in Riel. Yet in the end you estimate your business in US$.
>
> So your income and expense accounts should only exist in US$, while in your
> assets you will can two cash accounts: one in US$ and one in Riel.
>
> When a customer pays you in Riel, you make a transaction from your Riel cash
> box account to your single income account (which is in US$) and apply the
> exchange rate from Riel to US$ to that transaction. By default gnucash will
> ask you for this exchange rate. If a customer pays in US$ you create a
> transaction from your US$ cash box account to your income account. As the
> currencies match there's no conversion rate to apply.
>
> The same goes if you pay for expenses or goods to a supplier. If you pay in
> Riel you create a transaction from the Riel cash box account to the
> appropriate expense account (which is always in US$). If you pay in US$ the
> money goes out of your US$ cash box account into the (same) US$ expense
> account.
>
> That will give you all the information you request:
> Do you want to know what's in your cash boxes ? Check the appropriate cash box
> account or generate a report over it.
> Do you want to know how you did as a business ? Generate a report over your
> income/expense accounts which are in US$.
>
> Unless you have other requirements you didn't mention I don't think you need
> the parent/multi-currency-subaccount structure in your income and expense
> accounts as you have currently set up. And it will probably simplify your
> accounting if you could do without.
>
> Regards,
>
> Geert
>
> Op zaterdag 30 juni 2018 11:58:51 CEST schreef Norbert Klein:
>> Thanks, Geert,
>>
>> I will respond between the lines.
>>
>> On 29.6.2018 17:58, Geert Janssens wrote:
>>> Hi Norbert,
>>>
>>> I don't know the accounting customs of your country,
>> There are no general accounting customs set - everybody does what seems
>> to cover the needs of he place.
>>
>>> so first a question:
>>> Is it common in Cambodia to *account* in two currencies as well or only to
>>> *pay* in two currencies ?
>> In daily life, we may *pay* in either of the two currencies - it is only
>> customary to make payments in Riel for small and in US$ for larger
>> amounts. But again, there is no general definition what is "larger" - it
>> is easier to handle bigger "values" in US$, where 1 US$ corresponds to
>> roughly 4000 Riels.
>>
>> We may ask in our shop - as an example - for a price of US$ 4.00, but
>> the person may hand over 16,000 Riel. Or the other way round. I do not
>> know if there are many countries with such a situation. But here it is
>> totally flexible - every person, for every purchase, may choose one way,
>> and the next minute for another purchase the other way.
>>
>> So the answer is: BOTH - we pay in two currencies, but we also have to
>> account in two currencies.
>>
>> So in the shop we have a Riel cash box, and a US$ cash box, and while we
>> enter for each purchase an amount - and I have to enter the amount
>> either into the "Cash in wallet $" or into the "Cash in wallet Riel" -
>> because we have all the time changes in both cash boxes. And for the
>> same purchase I enter the amount either into the sub-account "Vegetables
>> $" or "Vegetables R" - both under ONE Placeholder account "Vegetables"
>> (set for US$)
>>
>>> Or put differently - do you want to track your income in the two
>>> currencies or just in one (hence the placeholder account) ?
>> For the actual conducting of purchases, I am tracking the US$ purchases
>> and the Riel purchases separately - but I put both under ONE placeholder
>> because I am not only interested in individual purchases, but also in
>> the overall income (or loss) situation. I had assumed to have a common
>> placeholder would serve this purpose. Maybe this was wrong.
>>
>>> But you do want to be able to
>>> accept/make payments in the two currencies ?
>> Yes - it depends on the buyer - depending of which of the two currencies
>> he of she has in their purse.
>>
>>> If you only want to accept/make payments in two currencies but just track
>>> it in one, the account structure would be slightly different.
>> "track it only in one" - for the actual operation of the shop this is
>> not possible. I have to know - at the end of the  day - how many US$,
>> and how many Riel, should be in the cash boxes.
>>
>>> If you want to track your income in multiple currencies as you have set
>>> up,
>>> you'll need to make sure you have entries in your price database for
>>> conversion rates between USD and Cambodia Riel.
>> In my former mail, I had said: "(In Tools, Price Editor, I have set
>> Khmer Riels as the second currency in addition to US$.)" - saying that 1
>> US$ corresponds to 4000 Riel, with hardly any fluctuation. Any more to do?
>>
>> But while I have to keep track of the actual cash in the cash boxes, at
>> certain times (daily, weekly, monthly etc.) I also need to know "how we
>> did as a business" and this should say something in US$ (for all the
>> activities which did happen in both currencies).
>>
>>> Or more generally between your
>>> book's currency and the foreign currencies you trade in.
>> Well, I do not feel that "we trade in a foreign currency" - both
>> currencies co-exist here in everybody's wallet. Te bill from the
>> electricity company comes in Riel, the bill from the ISP comes in US$ - etc.
>>
>> So what else can you please suggest to me to do?
>>
>> Really many thanks,
>>
>> Norbert
>>
>>> Regards,
>>>
>>> Geert
>>>
>>> Op vrijdag 29 juni 2018 12:28:00 CEST schreef Norbert Klein:
>>>> How to regularly use two currencies
>>>>
>>>> I would very much appreciate if somebody could help me to solve a
>>>> problem.
>>>>
>>>> In GnuCash 2.6.19,on a Windows 10 computer, I made the following
>>>> arrangements – but maybe my assumptions were wrong, as I cannot see the
>>>> results I had hope for. I do not have much experience, so I dare to ask
>>>> for advice and help.
>>>>
>>>> I live in Cambodia, where it is usual all over the country to use two
>>>> currencies regularly: the Cambodian Riel, and the US$ (at normally 4000
>>>> Riel per Dollar).
>>>>
>>>> (In Tools, Price Editor, I have set Khmer Riels as the second currency
>>>> in addition to US$.)
>>>>
>>>> I live on a farm, where, among other things, we produce, sell, and buy
>>>> vegetables.
>>>>
>>>> Under Income, I created an account FARM, and under FARM an account SHOP,
>>>> and under shop a Placeholder account VEGETABLES (currency USD). Under
>>>> VEGETABLES I created a VEG$ sub-account for business in US dollars, and
>>>> another sub-account VEGR for business in Riels.
>>>>
>>>> Now I enter all business actions into VEG$ or VEGR, either as Income or
>>>> Charge, according to the currency used.
>>>>
>>>> After some entries, I can see the calculated result (gain or loss) in
>>>> US$ in the Placeholder account VEGETABLES.
>>>>
>>>> I had hoped that the entries in VEGR would be transferred into US$ and
>>>> also be part of the reported results in the placeholder account
>>>> VEGETABLES – but this is not the case.
>>>>
>>>> Now my kind request:
>>>>
>>>> 1) please tell me if there is a way to get also the Riel values
>>>> reflected in the Placeholder account above the VEGR; I had assumed that
>>>> this should be possible with Placeholder accounts which are “intended to
>>>> be used for hierarchical organization of accounts” - but maybe not when
>>>> different currencies are involved?
>>>>
>>>> 2) please give me advice if all this is wrong – how could I handle our
>>>> situation? Every purchase and sale has to be recorded in one of the two
>>>> currencies.
>>>>
>>>> My hope was to get the overall results in US dollars in this way – and
>>>> the goal remains the same: at the end of he day/week/month, I want to
>>>> know how we did manage – all calculated in US$.
>>>>
>>>> Thanks for any help.
>>>>
>>>> Norbert KLEIN
>>>>
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