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I would like to get some feedback on what might be the most effective setup for multicurrency. I am working with a client that is based in the US with over 125 databases. They currently have one UK company that is being converted over to Dynamics. They are the only company not using US dollars. Normal operations in the past were to allow the UK company to process everything in pounds and when the information was posted to the US (summary GL journal only), a month end process was run offline to revalue pounds to dollars using a EOM rate for balance sheet (with historical on PPE) and average monthly for income statement items. The US company still wants to do exchange rate revaluation only at month end.
As I see it there are at least 2 options and I would appreciate some feedback on what would be the most efficient.
1. Set up the UK company with functional currency UK pounds, reporting currency US dollars. If you enter everything in pounds you must use FRX or Management reporter to do the conversion for you. Management’s concern here is that they do not want to have to do the calculation of exchange rate and if they do consolidated reporting the reports will not be correct. This can be addressed with a report specific to the UK company and the converted amounts pulled in via use of a tree.
2. Set up the UK company with functional currency US dollars, with all accounts having the ability to use UK pounds and force all entries to be done using the originating debit and credit fields. From my understanding, after you have set up the multicurrency rate and assigned accounts, then when you do a revalue the currency exchange gain or loss would be calculated. My concern using this method would be that it is easier for reporting at month end, but during the month for processing the UK folks will have to be sure to enter the transactions in originating currency for gl, and originating debit and credits for payables. I would worry that there could be some error and that some things would be posted in US dollars. The UK company does have a UK install.
I need to make a decision in this week and before I make my presentation to management, I would appreciate some feedback.
THANK YOU
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You can update the rate table as often as you want to keep realized and unrealized gains processing correctly. You are correct that the accounts can be revalued at month end prior to running reports from FRx or Management Reporter. Additionally, I have created a blog post that speaks to how to update the rate table on a daily basis.alldynamicsgp.com/.../gp-2010-multicurrency-rate-updates
I hope this helps.
Best to use Sterling as the Functional currency if at all possible. If you transact in VAT in the UK - then you could run into issues with VAT reporting if you had functional currency of USD. The Revenue in the UK do publish FX rates for converting foreign denominated values to Sterling for VAT calculations - but there is no way to automate this in GP interface [although it could be completed using reports]. same would apply to Intrastat and ESL reporting. We have a number of clients facing the exact same issues as you. In most cases they denominate in Sterling and use MR to consolidate. However some denominate the UK company in USD - but these are exceptions where the benefits of doing it this way far outweigh the downsides.
I presume the company databases [including the UK Company] are on the same instance of SQL server, and users are using remote desktop?
Ian.
Dynamics GP has a currency revaluation process where you can calculate exchange rate gain/loss automatically. Revaluation is different from Currency Translation, which is done for financial reporting, but currency translation also is supported for Dynamics GP and Management Reporter.
Thanks for the feedback. That is what I have now; however some management wants an automated currency exchange gain or loss created.
Thank you for taking the time to respond to me. Truly appreciated.
We have a company in the UK as well. Everything on the company is listed as Functional and reporting UK dollars and then when we do our month end, everything is converted. We have an average listing and a current listing (spot) for the currency which we import at every month end. There are only a couple of things you have to setup. Access to US$ for the UK and assign either Current or Average to every currency. It really is not that hard a setup and this way, your UK company continues doing what they do in GBP and nothing happens until you use Management Reporter at month end.
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