How to: Update Currency Exchange Rates

You must set up a code for each currency you use if you buy or sell in currencies other than your local currency, have receivables or payables in other currencies, or record G/L transactions in different currencies.

As companies operate in increasingly more countries/regions, it becomes more important that they be able to review or report financials in more than one currency. The program supports use of multiple currencies. Within the program, your general ledger is set up using your local currency (LCY), and another currency is set up as an additional currency, with a current exchange rate assigned.

By designating a second currency as an additional reporting currency, Financials will automatically record amounts in both LCY and this additional reporting currency on each G/L entry and on other entries, such as GST entries. When G/L entry amounts are calculated in an additional reporting currency, the information in the Currency Exchange Rates window is used to find the relevant exchange rate.

Warning

The Additional Reporting Currency functionality should NOT be used as a basis for financial statement translation. It is not a tool that can perform translation of foreign subsidiary financial statements as part of a company consolidation. The additional reporting currency functionality only provides the option of preparing reports in another currency, as if that currency was the company’s local currency.

Adjusting Exchange Rates

Because exchange rates fluctuate constantly, additional currency equivalents in your system must be adjusted periodically. If these adjustments are not done, amounts that have been converted from foreign (or additional) currencies and posted to the general ledger in LCY may be misleading. In addition, daily entries posted before a daily exchange rate is entered into the program must be updated after the daily exchange rate information is entered. The Adjust Exchange Rates batch job is used to adjust the exchange rates of posted customer, vendor and bank account entries. It can also update additional reporting currency amounts on G/L entries.

Displaying Reports and Amounts in the Additional Reporting Currency

Using an additional reporting currency can assist the reporting process for a company in the following cases:

  • Companies in non-EU countries/regions that have a high proportion of transactions with EU country/region companies. In this case, the non-EU company may also wish to report in euro to make its financial reports more usable for its EU trade partners.

  • Companies that also wish to display reports in a more internationally traded currency than their own local currency.

Several reports in the General Ledger application area are based on G/L entries. To display the financial data in the report in the additional reporting currency, you simply select the Show in Add.-Currency field in the relevant G/L report window.

Note

This functionality requires that your experience is set to Suite. For more information, see Customizing Your Financials Experience.

To set up a currency exchange rate service

You can use an external service to keep your currency exchange rates up to date. The Yahoo Currency Exchange Rates service is preinstalled and ready to enable.

  1. Choose the Search for Page or Report icon, enter Currency Exchange Rate Services, and then choose the related link.
  2. Choose the New action.
  3. In the Currency Exchange Rate Service window, fill in the fields as necessary. Choose a field to read a short description of the field or link to more information.
  4. Choose the Enabled check box to enable the service.

To update currency exchange rates through a service

  1. Choose the Search for Page or Report icon, enter Currencies, and then choose the related link.
  2. Choose the Update Exchange Rates action.

The value in the Exchange Rate field in the Currencies window is updated with the latest currency exchange rate.

See Also

Closing Years and Periods
Working with Financials