[GNC] How to regularly use two currencies

[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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