Managing Multiple Currencies in a Group

Each entity can have one base currency with multiple foreign currencies set up against it. If you operate multiple entities, they can all have different base currencies. To manage these entities, you can set up a Group Consolidating Entity and use its base currency to consolidate all the entities. See Using Multi-Entity Consolidation for more details.

Rates can be managed manually or using our partner XE for daily rates. These rates can be set to automatically update at 0.00 daily or as required. 

Managing Multiple Currencies for the same Account

If you want to deal with a customer or supplier in multiple currencies, set up separate master records for each currency. 

FX Transaction Rates

Deal with non-base currency customers and suppliers in their own currency or that of their bank. From your company’s perspective, these are foreign currency companies. 

On transactions, these rates will automatically be the same as the transaction date but can be edited as required. Any overrides on transactions will have no impact on the entity rate. If no rate exists you will receive a message: “No effective rate found for USD on 20 Sep 2024. Please maintain rates in FX Management.”

A View Rate History link is available on FX transactions.

XE fully replaces TransferMate, except for bulk payment when paying with TransferMate.

Period End Process

When you receive payment for a transaction you raised, it will be in the currency of the supplier, customer, or that of their bank. It will carry the exchange rate at the time of the bank payment or lodgement, along with the base currency amount. When the payment and invoice are allocated, any gain or loss resulting from exchange rate fluctuation will be calculated and self-reversing journals will be posted to the GL Currency Gain/Loss account.  

At the end of each Financial Period, it is advisable to reconcile ledgers and revalue the open Items to reflect the current Exchange Rates rather than historical ones.

Our partner XE can accommodate custom calendar structures in FX revaluation logic.

Permissions

Enable the following, ‘FX Rates Management’

New permission is:

• enabled by default to users with the Practice Administrator profile
• available to be enabled for any user with the Finance user type 
• NOT available for users with the Business user type - it is in disabled state
• enabled for users with a current permission to Codes Maintenance

See:

▶️ Foreign Currency Overview (8.0) - AIQ Academy

▶️ Add Edit Currency in a single Entity (8.1) - AIQ Academy

▶️ Add Edit Currency at Group Level (9.1) - AIQ Academy

📗 Using Foreign Exchange Revaluation Journals 

📗 Using Multi-Entity Consolidation 

📗 Using Codes Maintenance 

When currencies are set up at group level, they are available automatically in all subsidiaries. Their rates can also be managed at group level, so that all group entities receive the same rates. 

Prerequisites

Set the following permissions:

• Users must have the permission User can update Exchange Rates Across Consolidation Groups.

FX Management

Updating Group Currency Rates

There are three ways to access the Group Currency Rate table: 

• Consolidation Manager > Consolidation Exchange Rates tab > Maintain Transactional Exchange Rates for Group. View or update rates here.
• In the Entity Listing grid, go to the Actions dropdown of the Consolidation Entity and select Update Exchange Rates Across Group.
• In the Consolidation Entity, go to Setup > FX Management.

To update a rate, click on Update to Latest Rate, edit the System Rate, and click Process. 

Example: Effects of updating Exchange Rates at Group level

This example uses a STG as the base currency in the Consolidation Entity. When you update an Exchange Rate in the Group Currency Table, from Sterling to, for example, Euro, it will not just change the STG/EUR Rate in all Subsidiaries. Exchange rates are interdependent so any subsequent change in the relationship between STG and EUR will impact the USD to EUR relationship. For example:

• 1 £ Sterling = 1.25 € Euro
• 1 £ Sterling = 1.55 $ Dollar
• 1 $ Dollar = 0.80645 € Euro

Similar changes in the relationship between Sterling and the other Base Currencies will also cause modifications in other inter-currency relationships.

How is the exchange rate of a currency calculated when a subsidiary has a different base currency to the top consolidation entity?

Example for JPY: The exchange rates set in the top consolidation entity determine the rates for subsidiaries.

Top Consolidation Entity Base Currency: USD

• EUR to USD = 0.987650.
• JPY to USD = 141.000

Sub-Consolidation Entity Base Currency: EUR

• USD to EUR = 1.012504 USD. This is calculated based off the USD to EUR rate from top consolidation entity.
• JPY to EUR = 142.763EUR. This is calculated using the formula USD to JPY * EUR to USD (141 * 1.012504).

See:

▶️ Add Edit Currency in a single Entity (8.1) - AIQ Academy
▶️ Add Edit Currency at Group Level (9.1) - AIQ Academy

Add New Currency at Entity Level

Currencies added at entity level will only be available in that entity.

1. Go to Setup > FX Management.
   
2. Click Add New Currency.
3. Select the Currency from the dropdown and the other details will aurofill.
4. Click Save.

Managing FX Rates

The following actions are available:

• Automatic Updates: Decide whether to enable Automatic Updates. Enabling this will pull rates from our fx rate provider XE at 0:00 daily. Disabling this will let you update to the latest rate from XE as required. 
• Update All Rates: If automatic updates are off and you already have manual FX rate updates pending, you will be prompted of any conflicts. You can still choose to Update All and override any pending rates.
• 
• Filter: Use the column search fields to find information and click on the headers to sort in ascending or descending order.
• History: Click on the icon to view a history of rate updates for the period you select.  Every apply or manual edit (including effective date) is recorded (who, when, old/new value, source). A link to this rate history is available on FX transactions.
• Add / Remove Columns: Click on the icon to add or remove columns. 

Editing FX Rates

Any updates made to rates will be recorded under History. 

1. Enter the new rate directly in the Rate field.
2. Click Update.
3. In the Select Effective Date enter the required date.
4. Click Save. The rate is now updated from that date. 

Note the following editing rules:

• Note, if a rate is updated multiple times in one day, only the latest rate for that day will be recorded in History.
• If a rate is backdated, this will update all processed but not posted transactions.

Set your Entity's Base Currency

This base currency is the currency against which foreign exchange rates will be applied.

Only one base currency can be nominated. Exchange rates are expressed as 1 Unit of Base Currency = X Units of Foreign Currency. In periods of high Exchange Rate Volatility, revise, and update exchange rates frequently to provide the most accurate reflection of your Trading and Balance Sheet.

If you have multiple entities, each entity must have a base currency. Although this is normally assigned during company setup, you can change it if no transactions have been recorded in the entity yet.

See: 

📗 Creating a New Entity 

📗 Managing Company Details & Settings 

1. Go to Setup > Company Details & Settings.
   
2. Under the Company Details tab, select the required currency from the Base Currency dropdown. Complete any other relevant details. 
3. Click Save.

Set Customer and Supplier Currency Defaults

If your customers or suppliers predominantly use a given currency, setting it as a default will save time when creating new customers and suppliers.

See:

📗 Managing Default Settings 

1. Go to Setup > System Defaults. 
   
2. Click Open next to Customer Defaults or Supplier Defaults as relevant (Items and GL Accounts are automatically in base currency).
3. Select the appropriate base currency from the Currency dropdown. Complete any other relevant details. 
4. Click Process.

Update Customer and Supplier Currency Codes

When you set up a new Customer or Supplier, their currency code defaults to what was set up in Step 2 above. However, you can select another from those set up in the system. This then becomes the default during transaction entry stage.

This Supplier Account has the EUR set as their default Currency in the Account Details tab:

The default currency along with its equivalent amount in company base currency will appear during transaction entry stage. At this point, you can still enter a different rate in the Exchange Rate field if necessary.

See:

📗 Managing Customer Master Records 

📗 Managing Supplier Master Records