Apr 13, 2012 at 06:52 AM

Payment of Foreign Currency Invoice in Local Currency

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We have 2 parallel currency ledger configured in our SAP ECC6.0 system. We made a Purchase Order in Foreign Currency (USD) then did the GR and IR in USD but the payment to be made in Local Currency (PKR) after some days of booking IR. The payment also involves Tax Deduction At Source and the payment to be made from the Local Currency bank account.

When I try to post the payment in PKR, there comes the difference in PKR amount of the vendor as well as the Tax at source. Consider the following example:

01.04.2012 - IR in USD @ 90.0

Expense (DR) = 1000 (USD) or 90,000 (PKR)
Vendor (CR) = 1000 (USD) or 90,000 (PKR) with 15% Tax at source

10.04.2012 - F-58 (payment) in PKR with exchange rate 91.0/USD

Vendor (DR) = 90,000 (PKR) or 1000 (USD)

Tax at source (CR) = 13,500 (PKR) or 148.35 (USD)

Bank (CR) = 77,350 (PKR) or 850 (USD)

However, only bank line is correct and other 2 lines are incorrect. Differential is

Vendor (DR) = 1,000 (PKR) or 0.00 (USD)

Tax at source (CR) = 150 (PKR) or 1.65 (USD)

Please assist me in this regard, What I am doing wrong?? and how to rectify it??

Regards,

Shabbir