Transacting in Foreign Currency
The Currencies table allows companies to define the available Currencies they wish to use. For companies that leverage the Foreign Currency functionality, it is recommended to setup a Currency Gain/Loss Account that is tied to each Cash, A/R, and A/P Account that is in a currency other than the company's home currency. This account will be used when setting up Financial Statements for Foreign Currency Accounts. Benefits of transacting in foreign currency include increased accuracy of transactions, minimal maintenance needs, access to currency history, and reporting.
The main benefit of utilizing foreign currencies in DEACOM is increased accuracy when doing foreign currency transactions. Once you have set up DEACOM to automatically pull in currency conversion rates according to your base default currency, no more maintenance needs to be done. This will save a lot of time versus constantly updating the conversion rates in the system manually. This means that each transaction and conversion will be accurate to the day in which it happened rather than using a rate which may have fluctuated. Using this method will also eliminate the need to do any type of conversions with item prices/costs. For Purchase Orders, the exchange rate is locked in at the time of receipt. For Sales Orders, it is locked in at the time of invoicing.
DEACOM also tracks the rate of each currency in the Currency History table which makes it very easy to trace back and see what the conversion rate was at the time of the order. This eliminates any second-guessing the original pricing on an order where an unknown conversion rate was used.
Another useful perk of using foreign currencies is reporting. Many different reports in DEACOM can be published in different currencies. This is accomplished via the “Display Currency” field located on Page 2 of the pre-filter. This feature allows users to analyze report results in currencies different from the one used to process the order. Amounts on the reports are calculated and displayed according to what the exchange rate was on the order’s Invoiced Date
Configuration
Currency rates can automatically be updated on a daily basis through the DEACOM Automation Service. DEACOM updates currency rates daily at 9:00am EST. The "Currency Update" field on the General tab in Accounting > Options allows a company to control when their own rates in DEACOM are updated. The DEACOM application connects to the European Central Bank or Bank of Canada to obtain currency exchange rates.
Notes:
- In order to use this functionality, which is optional, the currency name must match up with the currency name used by Deacom's service. The currency and its respective currency name used by Deacom's service is outlined in the Process section below. The "Name" field in the maintenance table must match up with the "Abbreviation" in the table.
- By default, the currency name for US Dollars is "US Dollars" when first installing DEACOM. Users will need to change this to "USD" if wishing to use the feature mentioned above.
- Work Center Currency - Optional.
Process
Adding a new Currency
- Navigate to Accounting > Maintenance > Currencies.
- Click "Add New".
- Enter a Name for the new record, in accordance with the below table, as well as a Description, Rate, and Symbol.
- Select from the pick list the account to which the Currency Gain/Loss should be booked.
- If this Currency should be used as the home currency, check off the "Default" flag.
- Check off the "Update Rates Automatically" flag for the rate to be automatically updated by the Automation Service, in accordance with the selection in System Options (mentioned above).
Currency Names
The table below outlines the abbreviations that must be used in the "Name" field within DEACOM if the currency rates are automatically updated:
|
Abbreviation |
Symbol |
Currency |
|---|---|---|
| USD | $ | United States Dollar |
| EUR | € | Euro |
| JPY | ¥ | Japanese Yen |
| BGN | лв | Bulgarian Lev |
| CZK | Kč | Czech Republic Koruna |
| GBP | £ | United Kingdom Pound |
| HUF | Ft | Hungary Forint |
| LTL | Lt | Lithuania Litas |
| LVL | Ls | Latvia Lat |
| PLN | zł | Poland Zloty |
| RON | lei | Romania New Leu |
| SEK | kr | Sweden Krona |
| CHF | CHF | Switzerland Franc |
| NOK | kr | Norway Krone |
| HRK | kn | Croatia Kuna |
| RUB | руб | Russia Ruble |
| TRY | YTL | Turkey Lira |
| AUD | $ | Australia Dollar |
| BRL | R$ | Brazil Real |
| CAD | $ | Canada Dollar |
| CNY | ¥ | Chinese Yuan |
| HKD | $ | Hong Kong Dollar |
| IDR | Rp | Indonesia Rupiah |
| ILS | ₪ | Israel Shekel |
| INR | ₹ | India Rupee |
| KRW | ₩ | South Korea Won |
| MXN | $ | Mexico Peso |
| MYR | RM | Malaysia Ringgit |
| NZD | $ | New Zealand Dollar |
| PHP | ₱ | Philippines Peso |
| SGD | $ | Singapore Dollar |
| THB | ฿ | Thailand Baht |
| ZAR | R | South Africa Rand |
| TWD | $ | Taiwanese Dollar |
Posting in Foreign Currency
Sales Orders and Purchase Orders may both be created in any active Currency. When posting payments for these transactions in foreign currencies, the system posts the difference in the currency value from when the order was invoiced. To select a Currency other than the default, select the desired Currency from the pick list on the General tab of the header of either the Sales or Purchase Order.
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Note: Individual Facilities may have their own currency specified via Inventory > Maintenance > Facilities. This option is useful for scenarios in which different Facilities may be located in different countries and therefore their home currencies would differ.
To pull a list of all orders created in a specific Currency, navigate to either Sales > Order Reporting or Purchasing > Order Reporting. On Page 2 of either pre-filter, make a selection from the "Currency filter" pick list then click "View". This will display all orders created in the selected Currency and according to any other filter selections.
Reporting in Foreign Currency
Payables and Receivables Summary and Detail Reports
Between the time of receipt and the time of payment for a Purchase Order created in foreign currency, there is an unrealized gain/loss on the transaction. The parallel to this is the unrealized gain/loss that occurs between the time a foreign currency Sales Order is shipped and the time it is paid. The "currdiff" column in the Payables and Receivables Summary and Detail reports in Accounting Reporting displays the unrealized currency gain/loss. This ensures that the ledger and sub-ledger consistently stay in balance for foreign currency transactions.
Trial Balance, GL Summary, GL History, and Financial Statements
The Trial Balance, GL Summary, GL History, and Financial Statement reports leverage the "Currency" and "Unrealized Gain" account fields established in the Chart of Accounts. The difference in value for each posting at the time it was made and its value at the current exchange rate is automatically added to the "Unrealized Gain" account specified for that account to show a virtual balance that doesn't really exist in the GL. Each Unrealized Gain account should be included in the Financial Statements so that gains and losses from transactions are properly captured.
When running the "GL Detail", "GL Summary", or "Trial Balance" reports in Accounting > Accounting Reporting, the system will use the exchange rate on the posting date(s) of the various transactions in the report when converting home currency postings to the requested foreign currency. For more information on generating Accounting reports, refer to Accounting and Finance Reporting.
Notes:
- When running the GL Summary report by "End Date," the starting column is calculated using the currency rate as of the COB the day before the starting date, the debits and credits column are calculated using the currency rate as of the transaction date, and the ending column is calculated using the currency rate as of the COB of the ending date.
- Running the GL or Trial Balance reports by End Date will not float foreign currency accounts that do not have an unrealized gain/loss account linked to them. This supports accounting best practice methods.
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A list of the conversion methods are included below. Note that "gl_fcdebits" refers to the foreign currency debits and "gl_fccredits" refer to the foreign currency credits in the list below. In addition, "USD" refers to US Dollars, "CAD" refers to Canadian Dollars, and "EUR" refers to Euros.
Conversion methods, given gl_debits = USD and gl_fcdebits = transaction currency:
- USD report, USD account, USD transaction = (gl_debits - gl_credits) with no conversion.
- USD report, USD account, CAD transaction = (gl_debits - gl_credits) with no conversion.
- USD report, CAD account, USD transaction = (gl_fcdebits - gl_fccredits) / current CAD rate.
- USD report, CAD account, CAD transaction = (gl_fcdebits - gl_fccredits) / current CAD rate.
- USD report, CAD account, EUR transaction = (gl_debits - gl_credits) * historical CAD rate / current CAD rate.
- USD report, EUR account, USD transaction = (gl_fcdebits - gl_fccredits) / current EUR rate.
- USD report, EUR account, CAD transaction = (gl_debits - gl_credits) * historical EUR rate / current EUR rate.
- USD report, EUR account, EUR transaction = (gl_debits - gl_credits) / current EUR rate.
- CAD report, USD account, USD transaction = (gl_debits - gl_credits) * current CAD rate.
- CAD report, USD account, CAD transaction = (gl_debits - gl_credits) * current CAD rate.
- CAD report, CAD account, USD transaction = (gl_fcdebits - gl_fccredits) with no conversion.
- CAD report, CAD account, CAD transaction = (gl_fcdebits - gl_fccredits) with no conversion.
- CAD report, CAD account, EUR transaction = (gl_debits - gl_credits) * historical CAD rate.
- CAD report, EUR account, USD transaction = (gl_debits - gl_credits) * historical EUR rate / current EUR rate * current CAD rate.
- CAD report, EUR account, CAD transaction = (gl_debits - gl_credits) * historical EUR rate / current EUR rate * current CAD rate.
- CAD report, EUR account, EUR transaction = (gl_fcdebits - gl_fccredits) / current EUR rate * historical CAD rate.
Sales Order Summary and Detail Reports
Several reports in Sales > Order Reporting, including the Sales Order Summary and Sales Order Detail reports, can be used to analyze totals in a different currency. This is accomplished via the "Display Currency" field located on the Page 2 tab of the Sales > Order Reporting pre-filter. This field allows users to specify the Currency in which to display the amounts in the report results. In situations where the display currency selected is different than the currency on the order, the reports will convert the amount on the displayed orders to the exchange rate of the display currency as of the sales order invoiced date.
Viewing Currency History
The Currency History table, accessible by navigating to Accounting > Maintenance > Currency History, allows users to see an archived list of all foreign currency rates used in the system. A pre-filter form is available to filter the historical records. The historical rates may be modified or deleted as necessary, however, this is not recommended.
Modifying or deleting historical currency records can be used to change the rate used when creating Financial Statements and Accounting Reports, such as Open A/R and A/P reports at the month end close. If a foreign currency rate does not exist on a day a report is run or a transaction is dated, the system will go back in time until a rate is established for the respective currency. Foreign currency rates are stored on Purchase Orders and Sales Orders so updating the rates will not change the rate stored as part of the transaction.
Foreign Currency Field and Calculated Field Definitions
|
Field Name |
Definition |
|---|---|
|
TP_FCRATE/TO_FCRATE |
Rate when the PO/SO was created |
|
TP_FCRATE2/TO_FCRATE2 |
Rate at invoicing |
|
GL_RATE |
Rate on the date the transaction occurred |
|
FC_RATE |
This is the current rate, what you would see if you navigated to Accounting > Maintenance > Currencies |
FAQ & Diagnostic Tips
How can I get the foreign currency symbol and name to print on Sales Order documents?
The field "fc_symbol" will print the symbol and the field "fc_name" will print the name. These fields are maintained in Accounting > Maintenance > Currencies.
How is the currency exchange rate stored/updated on sales orders?
In DEACOM, the Foreign Currency Exchange Rate is updated at the time of invoicing, and not at the time of shipping.
Does the currency gain/loss posting honor GL Overrides?
Yes. Only one currency gain/loss account may be specified in Accounting > Options > General tab, but multiple facility specific gain/loss accounts may be created in the Chart of Accounts. The system will use these accounts if the correct GL Overrides are set up in DEACOM.
Tip: The security setting "Accounting -- edit currency on journal entry line" can be used to prevent users form selecting a different currency when entering or modifying a journal entry line.
Tip: