Exchange rate "1" for foreign currency receipts: why the cost is calculated incorrectly and how to recalculate it

When purchasing goods in a foreign currency, Torgsoft stores the currency of the goods receipt, the supplier price, and the exchange rate to UAH. These data may be used to calculate the cost price. Business owners contact technical support when, for example, a product was purchased for 10 USD, but its cost price in «Warehouse Status» is displayed as UAH 10, profit changes sharply after the receipt, or the figures in reports remain unchanged after correcting the exchange rate. One possible reason is a foreign currency exchange rate of «1» in the goods receipt or the exchange rate directory. To correct the issue, you need to find the source of the incorrect exchange rate, check the cost price calculation method, and recalculate the cost price after making the correction.

What the exchange rate means in a foreign-currency receipt

When a supplier sets a price in a foreign currency, you can select this currency when creating a goods receipt in Torgsoft.

The document displays the «Exchange rate to UAH» field. It is used to convert the foreign-currency purchase price into the national currency.

For example:

• supplier price — 10 USD;

• exchange rate — UAH 40 per 1 USD;

• purchase amount in UAH equivalent — UAH 400.

If an exchange rate of 1 is accidentally specified in the same receipt, the program will calculate: 10 × 1 = UAH 10. As a result, the UAH value of the purchase no longer corresponds to the actual cost of the product.

The official Torgsoft help confirms that when a currency other than the national currency is selected in a goods receipt, the «Exchange rate to UAH» field is used, and the foreign-currency and UAH purchase prices are linked through this exchange rate.

How an exchange rate of «1» affects the cost price

Cost price in Torgsoft depends on the selected calculation method. You can check it under: Settings → Parameters → Accounting → Product cost price calculation method.

Therefore, the same incorrect exchange rate may affect different databases differently.

If «Last purchase price» is used

With this method, the cost price in «Warehouse Status» is determined based on the latest purchase price.

If the latest purchase was made in a foreign currency, Torgsoft takes the exchange rate into account. The official documentation states that for the latest purchase price in a foreign currency, the cost price is calculated using the current exchange rate in the program or the exchange rate from the goods receipt according to the rules of this method.

Therefore, an exchange rate entry of «1» can result in a significantly understated cost price.

If the batch method with a currency exchange rate is used

For batch accounting methods, Torgsoft has the «Take the currency purchase rate into account» setting.

If it is enabled and the goods were purchased in a foreign currency, the program calculates the cost price of the remaining stock based on the corresponding goods receipts and takes the currency exchange rate into account. When filling in the cost price in outgoing documents, the exchange rate may also be included in the calculation.

This means that the source of the problem may not only be the exchange rate in a specific receipt. You should also check the general directory: Payment → Currency Exchange Rate.

Two places where you should look for an exchange rate of «1»

This is the key point of the diagnosis.

1. Exchange rate in the goods receipt

It is located in the parameters of the specific receipt.

For example:

• currency — USD;

• price — 10 USD;

• exchange rate to UAH — 1.

Such a document contains an incorrect currency conversion from the outset.

Among typical situations involving purchase prices, the Torgsoft website separately describes a case where the currency exchange rate in the header of a goods receipt is accidentally set to 1: this can cause prices, cost prices, and document amounts to be calculated incorrectly.

2. Exchange rate in the «Currency Exchange Rate» directory

Open: Payment → Currency Exchange Rate. Currency exchange rates by date are stored here.

Torgsoft uses this directory for foreign-currency transactions, including goods receipts and certain cost price calculation methods.

For example, if the directory contains:

the entry for 02.09 is the one that needs to be checked.

For USD or EUR, a value of UAH 1 clearly does not correspond to the actual exchange rate. If the cost price calculation method uses this entry, the value may change not only for one new receipt.

What the problem looks like in «Warehouse Status»

One of the most typical symptoms is that the cost price becomes numerically similar to the foreign-currency purchase price.

For example:

• purchase — 12 USD;

• normal exchange rate — UAH 41;

• expected UAH value — approximately UAH 492;

• in «Warehouse Status», the cost price is approximately UAH 12.

This is a strong indication that an exchange rate of 1 was applied at one of the currency conversion stages.

However, you should not change the exchange rate based on this indication alone. The cost price may also be incorrect for other reasons: an incorrect purchase price, additional costs included in the cost price, another calculation method, negative stock balances, or specific features of batch accounting.

Therefore, first find the specific receipt.

Open: Warehouse → Warehouse Status. Find the product with a suspicious cost price.

Check:

• the latest purchase price;

• the currency of the latest purchase;

• the cost price;

• the date of the latest receipt.

If necessary, open the product movement history or the corresponding goods receipt to determine which delivery the product came from. Do not correct the exchange rate throughout the entire database immediately. First confirm the problem for a specific product.

Open: Document → Goods Receipt. Find the required receipt and open its parameters using «Change receipt parameters».

Check:

• the currency;

• the exchange rate to UAH;

• the product purchase price;

• the UAH equivalent.

If the product was purchased for 10 USD and the «Exchange rate to UAH» field contains 1, you need to enter the correct value that was used for this receipt according to your records.

When the currency or exchange rate is changed in an already completed goods receipt, Torgsoft notifies you that the parameters have changed and offers to recalculate the prices in the document.

This operation must be performed so that the products in the receipt correspond to the corrected exchange rate.

Even if the exchange rate in the goods receipt is correct, check: Payment → Currency Exchange Rate.

Find the required currency and review the entries:

• on the receipt date;

• after the receipt date;

• on the date when the cost price became incorrect.

This is especially important if the selected cost price calculation method takes current currency exchange rates into account.

For the batch method with the «Take the currency purchase rate into account» setting, Torgsoft uses the nearest applicable exchange rate according to the receipt date and the time of calculation. If no applicable exchange rate is available, the program uses the cost price from the receipt.

Therefore, the situation may look like this:

1. the product was correctly received at an exchange rate of 40;

2. a few days later, an exchange rate of 1 was mistakenly added to the directory;

3. the cost price was recalculated;

4. the incorrect value started being used for the product.

In this case, editing the goods receipt alone is not enough. You need to correct the incorrect entry in the exchange rate directory.

In the Payment → Currency Exchange Rate  form, find the entry with the incorrect value.

Check:

• the currency;

• the date;

• the purchase exchange rate;

• the selling exchange rate;

• the neighboring entries for the previous and following dates.

Then correct the entry according to the actual data in your records.

Do not arbitrarily enter today’s exchange rate into an old document. If the problem concerns a historical receipt, you need to restore the exchange rate that should be used specifically for that transaction.

You should also avoid deleting exchange rates for an entire period in bulk. Other foreign-currency receipts and calculations may use these entries.

After correcting the exchange rate, open: Settings → Parameters → Accounting. Check the «Product cost price calculation method» field. This helps you understand which data the program will use after recalculation.

«Last purchase price»

The cost price is based on the latest purchase price. For a foreign-currency receipt, the currency exchange rate is included in the calculation.

«By delivery batches»

Torgsoft determines which receipts make up the remaining stock or from which batch the product was sold.

If «Take the currency purchase rate into account» is also enabled, the exchange rate begins to affect the calculation of foreign-currency batches.

This is why, after an incorrect exchange rate appears, one database may show a distorted cost price while another database using a different method may not.

Correcting the exchange rate changes the source data. To make Torgsoft recalculate the cost price of the products, you need to start a cost price recalculation.

Open: Warehouse → Warehouse Status. Use the «Recalculate cost price» action.

Torgsoft offers two options:

1. Recalculate the cost price for all products.

2. Recalculate the cost price for selected products.

For selected products, the calculation is performed forcibly for those specific items. When recalculating all products, the program takes into account movements that occurred after the previous calculation in the current period.

If the problem concerns one receipt or several products, it is advisable to recalculate the selected items first. You can then check the result and run a broader recalculation only if necessary.

Why the cost price did not change immediately after correcting the exchange rate

This is one of the common questions. The exchange rate is an input parameter for the calculation. The cost price is a calculated result.

Therefore, the sequence is: correct the exchange rate → recalculate the cost price → check the new result.

If you only change the value in «Payment → Currency Exchange Rate» and immediately review previously calculated data, it may remain unchanged until the next recalculation.

The Torgsoft documentation explicitly states that after changes affecting the foreign-currency cost price, you need to perform «Recalculate cost price». The calculated value is then used in analytical reports and to determine the actual markup in «Warehouse Status».

How to check that the cost price has been corrected

After recalculation, return to: Warehouse → Warehouse Status.

For the problem product, compare:

• the purchase price in foreign currency;

• the exchange rate;

• the purchase price in UAH;

• the cost price;

• the actual markup.

For example, before correction:

• purchase — 10 USD;

• incorrect exchange rate — 1;

• cost price — approximately UAH 10.

After correction:

• purchase — 10 USD;

• correct exchange rate — 40;

• basic purchase value in UAH — approximately UAH 400.

The actual cost price may differ from UAH 400 if additional expenses are included in the product cost or if the selected calculation method uses several batches.

Therefore, you should check the logic of your specific delivery rather than expect the cost price to mechanically match a single figure.

How an incorrect cost price affects profit

Profit on goods depends on the cost price.

Suppose:

• selling price — UAH 600;

• actual cost price — UAH 400.

Then the profit on the product is:

600 − 400 = UAH 200.

With an incorrect exchange rate of 1, Torgsoft may calculate a significantly lower cost price, for example UAH 10.

Then the same sale will appear in the calculations as follows: 600 − 10 = UAH 590. The sale has not become more profitable. The accounting value of the cost price has changed.

As a result, reports that use the cost of goods sold may also change: profitability analysis, revenue analysis, markup indicators, and other product analytics. The official Torgsoft help directly uses the cost of goods sold in a number of analytical reports.

Do you need to change the retail price afterward

If the problem was only an incorrect cost price, you do not need to change the retail price to correct it.

These are different values:

• selling price — the price at which the store sells the product;

• supplier price — the price at which the product was purchased;

• cost price — the product value that Torgsoft uses for warehouse and analytical accounting.

Correcting the exchange rate and recalculating the cost price resolves the issue with the accounting value itself.

If the business separately wants to revise selling prices due to a change in the exchange rate, that is a different operation and is not required to restore the correct cost price.

Can you simply disable «Take the currency purchase rate into account»

You should not disable this setting merely to hide an incorrect result.

First, determine the cause:

• an incorrect exchange rate in the receipt;

• an incorrect entry in the directory;

• an incorrect cost price calculation method;

• an incorrect purchase price.

The «Take the currency purchase rate into account» parameter defines the accounting method itself. Changing it affects not only one problem product but the calculation of foreign-currency cost prices as a whole.

If the business genuinely wants to change its cost price calculation method, this should be done separately after assessing the consequences for the entire accounting system.

What to do if the exchange rate in the receipt is correct but the cost price still equals the foreign-currency price

Check in the following order:

1. Determine the cost price calculation method.

2. Check «Payment → Currency Exchange Rate».

3. Check all entries for the required currency after the receipt date that may be involved in the calculation.

4. Check whether «Take the currency purchase rate into account» is enabled.

5. Recalculate the cost price for the specific product.

6. Check which goods receipt the calculation method actually uses for the product.

For batch accounting, it is important that the cost price depends on the specific batches remaining in stock or from which the product was written off. Therefore, the most recently opened receipt is not always the source of the cost price for a specific stock balance.

What to do if the incorrect exchange rate was in an old receipt

Correcting an old foreign-currency receipt requires additional care.

Changing the exchange rate may affect:

• purchase amounts in the document;

• settlements with the supplier;

• the cost price of remaining stock;

• the cost of goods sold;

• analytical reports for the relevant period.

Therefore, before editing an old receipt, check whether goods from this batch have already been sold and whether the relevant accounting period has been closed.

For old documents, a large number of sales, or complex batch accounting, it is better to create a database backup first and agree on the correction procedure with Torgsoft technical support.

Can automatic cost price recalculation be configured

Yes. Torgsoft has a scheduled task for cost price calculation.

This mode allows you to set a start time and run the calculation automatically. It is intended to keep cost price data up to date on a regular basis. However, automatic recalculation does not correct an incorrect exchange rate.

If the directory contains 1 instead of the correct value, the automatic task will simply perform the calculation again using the incorrect source data.

The correct sequence is: find the incorrect exchange rate → correct it → recalculate the cost price.

How to quickly find the cause: step-by-step check

If the cost price of a product purchased in foreign currency has become incorrect:

1. Open Warehouse → Warehouse Status.

2. Select one problem product.

3. Check its currency and latest purchase price.

4. Find the corresponding goods receipt.

5. Check the «Exchange rate to UAH» in it.

6. If the exchange rate is 1 for USD, EUR, or another currency whose actual exchange rate is different, correct the receipt parameters.

7. Check Payment → Currency Exchange Rate.

8. Find entries with an exchange rate of 1 for the relevant dates.

9. Correct only entries that have been confirmed as incorrect.

10. Check Settings → Parameters → Accounting → Product cost price calculation method.

11. Check the «Take the currency purchase rate into account» parameter if it is used by your calculation method.

12. In Warehouse Status, run «Recalculate cost price for selected products».

13. Check the new cost price and actual markup.

14. If the incorrect exchange rate affected many products, perform a broader recalculation after checking the result on individual items.

An exchange rate of «1» should be considered the root cause only after checking the specific receipt and the cost price calculation method. For a foreign-currency purchase, an incorrect exchange rate affects the UAH equivalent and, for methods that use the currency exchange rate during calculation, the current cost price as well. After correcting the source exchange rate, you need to instruct Torgsoft to recalculate the cost price so that the program recalculates warehouse and analytical indicators using the correct data.