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foreign exchange (FX) linkage to FCY payments / receipts

Dec 28, 2017 at 11:44 AM


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Dear Experts,

Greetings for the day!

For making foreign currency payments, we cover rates (forward, Spot or cash) with counter-parties (Banks) from where we are to effect payments.

We capture these rates as FX deals (60A product types) in TRM. We simply fix flows (1000 & 2000, Buy and Sale foreign exchange) when we take delivery of this deal for making payments; no accounting entry from this deal is passed. Independent accounting entry for payment is passed with the exchange rate we have covered as above.

My problem is, there is no reconciliation / control between rate we have covered & recorded in 60A deal and rate being used for passing accounting entry for payment. In other words, If Bank debits my account with different exchange rate and my processing clerk fails to check rate used for payment by Bank, there's is a risk that we may end up losing money, despite hedging ourselves.

Could you guide me as to how should we structure our SAP to mitigate this risk, instead of being dependent on manual checking by processing clerk.

Thanking you in advance.

Regards / Kapil

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