Multi-Currency Overview and Setup

Accolent ERP supports multi-currency through an API that delivers global FX Rates. There are four important multi-currency setup steps: (1) Multi-currency is an optional module, and so must first be enabled, (2) Foreign Currencies and the functional currency then need to be set up, (3) Foreign Currency Vendors and Customers need be set up and (4) for all products that will be purchased/sold in Foreign Currency their Multi-currency Prices & Costs need to be saved. Once these basic set up steps are complete, POs can be created for Vendors in foreign currency. Similarly, Quotes, Orders, Invoices can be created for Customers in foreign currency. All GL Postings are done in the functional currency using the FX Rates in effect as of the date of the GL Postings. Variances in the FX Rates can create FX Gains/Losses which can be Unrealized or Realized.

Multi-Currency Overview

I. Enable Multi-currency on Configuration Screen

• Go to Settings > System > System Configuration and enable multi-currency.

IIA. Set up Currencies in the Value List

• Go to Settings > Value Lists > Value Lists (A to L) > Currencies.
• Over 200 global currencies are already set up but are Inactive by default except for the functional currency (e.g., USD).
• To set up a currency, select from the list and make Active then Save.

• Real-time FX Rates are obtained from this leading provider: Exchange Rates API.
• Every transaction for a foreign Vendor or foreign Customer uses an API to get daily FX Rates.

IIB. Set up Functional Currency

• Go to Settings > System > System Configuration and set up functional currency.

IIIA. Create Foreign Currency Vendor(s)

• Create Vendor ITA345 with Currency EUR.

IIIB. Create Foreign Currency Customer(s)

• Create Customer MC587 with Currency MXN (Mexican Peso).

IV. Set up Multi-Currency Prices & Costs for Product(s)

• Create product CHI12345 in the normal way.
• The only differences for a product bought/sold in foreign currency are that: (1) the product has a Foreign Currency Primary Vendor as ITA345 and (2) Multi-Currency Prices & Costs should be set up for the product.

• Set up USD Prices and Costs: List = $320/CS, PO = $150/CS.

• Click on Actions > Multi-currency Price & Cost to set up price and cost in Foreign Currencies (e.g., EUR and GBP).
• Enter EUR Price = €300 and EUR Cost = €145.00.
• Enter GBP Price = £260 and GBP Cost = £125.00.

• Similarly go to Product B74548 Actions > Multi-currency Price & Cost to set up price and cost in Foreign Currencies (e.g., MXN).

Multi-Currency Transaction Overview

• At this point, the multi-currency setup steps are complete.
• The system will now allow the creation of POs in foreign currency for Vendors.
  • When a PO is received, Inventory will be debited for the functional currency equivalent at the FX Rate in effect as of the date of PO Receipt.
  • When the Vendor’s Invoice is received Accounts Payable will be credited for the functional currency equivalent at the FX Rate in effect as of the date of the Vendor’s Invoice.
  • The difference between the Inventory value and the Accounts Payable value will create a temporary Unrealized Gain/Loss on FX.
  • When the Vendor is paid, Cash will be credited for the functional currency equivalent at the FX Rate in effect as of the date of Payment.
  • The difference between the Inventory value and the Payment value will reverse any temporary Unrealized Gain/Loss on FX and create a Realized Gain/Loss on FX.
• The system will also allow the creation of Invoices in foreign currency for Customers.
  • When an order is Invoiced, Sales will be credited and Accounts Receivable debited for the functional currency equivalent at the FX Rate in effect as of the date of the Invoice.
  • When the Invoice is paid Accounts Receivable will be credited for the functional currency equivalent at the FX Rate in effect as of the date of Payment.
  • Any difference between the Sales value and the Payment value will create a Realized Gain/Loss on FX.