Multi-Currency Overview

Your company may need to work with your customers and vendors in their own currencies, which may be different than your company's base (domestic) currency. The system makes this possible through the following multi-currency features:

• Maintainable currency rates. This is done on the Currency Rates form.
• Transactions using either fixed or variable rates. (To specify a fixed rate for a specific transaction, select the Fixed Rate check box in the transaction's form.)
• Euro conversion tools.
• FASB52 compliance.
• Recognition of currency exchange rate gains or losses.
• Customer and vendor records maintained in the foreign currency but that can quickly be translated to your domestic currency.
• A third currency involved on the following forms: A/P Payments, A/P Quick Payment Application, A/P Payment Distributions, A/R Payments, A/R Quick Payment Application, and A/R Payment Distributions. For example, on the A/P Payments form, you can allow a payment to be made that is in a currency other than the domestic or vendor currency. In this case, you use the Payment currency.
• Multiple currencies maintained for individual customers and vendors.
• Currency exchange rate overrides and thresholds, as specified on the Multi-Currency Parameters form.
• Your general ledger maintained in your domestic currency.

Typically, system users of multi-currency tend to fall into two categories:

• Companies who process all transactions for a month at a given exchange rate. At the end of each month (or the beginning of the next month), the company performs a revaluation of all foreign currency transactions.

  When you run the revaluation utility, you can post changes as unrealized. For example, you may decide at the end of March that the balance sheet needs to be valued at a certain rate, and this rate holds for all revenue and expense accounts for April. You enter the new rate on the Currency Rates form, and the reversing date for the journals created by the revaluation utility would be April 30. As a general rule, you should always date the reversals prior to the next change of the exchange rate.

• Companies who negotiate each foreign currency transaction at a fixed rate agreed with the customer/vendor. Payments are at that fixed rate. When using a fixed rate, specify that rate on the Customer Orders or Purchase Orders form's Amounts tab. (Running the Currency Revaluation utilities will not impact these entries.)

  Even if your company uses fixed rates for specific transactions, you must enter a buying and selling exchange rate on the Currency Rates form. These rates should reflect a current value to use as the default in case a customer order or purchase order transaction is accidentally posted without a fixed rate. (The default customer order exchange rate maps to the selling rate, while the default purchase order exchange rate maps to the buying rate.) Each time you update the rates on the Currency Rates form, run the revaluation utility to highlight any posted invoices that do not have a fixed rate.

If your company uses a hybrid system (that is, using both the system exchange rate and orders with fixed rates), the rate should be managed as described above.