How to setup hedging in GP? or in other words fixing the exchange rate.

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Posted on by Spencer Lowe

I'm looking for an answer, work-around, develop idea, app or solution to this problem.

In my current version of GP 2013 I cannot find a way to change the foreign currency exchange rate on a purchase order and have it not revalue at the end of the month.

As an concrete example

I create a purchase order for 100,000 in USD.

I don't have 100,000 USD so I talk to the bank and arrange a hedge for 100,000 USD in 3 months at an agreed upon rate (say 1.3 USD to CDN)

In 3 months the current exchange rate to USD is 1.35. The hedge was for $130,000 Canadian not $135,000.

I want to receive to inventory $130,000 worth of inventory and setup the invoice for $100,000 USD at 1.3

And at the end of the month I do not want the AP or Bank to be revalued to $135,000

I found this article somewhat helpful and figured I might be able to use segments to exclude GL's but no luck in finding a way to adjust the FX on the purchase order or invoice.

http://dynamicsgphelp.com/2011/05/digging-deep-into-multicurrency-revaluation/

I have spoken with my current provider and they say there is no solution but I want a 2nd opinion

Is there a solution available by upgrading to GP 2017?

How much would it cost to develop a solution?

Is there a solution already out there that someone has created and we can purchase?

Thanks

Spencer

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MG-16101311-0 26,225 on at

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Revaluation is optional. You do not need to apply revaluation to a vendor account if you don't want to. What I would do is setup an Exchange Rate table called USD_HEDGE. This table would maintain all the agreed upon rates with the bank and when they take effect. When receive the products and create the vendor payment, GP will then look at this exchange rate table to obtain the hedged exchange rate at the receipt or payment date.

If you need to show a gain or loss against the actual exchange rate, you will have to enter those as standard bank transactions

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Spencer Lowe on at

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Mariano Gomez

Revaluation is optional. You do not need to apply revaluation to a vendor account if you don't want to. What I would do is setup an Exchange Rate table called USD_HEDGE. This table would maintain all the agreed upon rates with the bank and when they take effect. When receive the products and create the vendor payment, GP will then look at this exchange rate table to obtain the hedged exchange rate at the receipt or payment date.

If you need to show a gain or loss against the actual exchange rate, you will have to enter those as standard bank transactions

thanks Mariano, I did think about something like this, the problem is I have multiple purchase orders and multiple vendors.

In theory there could be 2 different po's being received at different rates on the same date. I suppose one option would be to create an exchange rate table for each po, ie P099234 and P099245 , etc. but I didn't want it to clutter up this table.

Thanks

Spencer

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Community Member on at

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Hello Spencer - I hold the CPA CMA designation and the MCBMSP specializing in the financial suite of Dynamics GP. Hedging is one area of GP that does not work as a standard out of the box solution. As Mariano described a series of complicated workarounds with multiple exchange rate tables and manual adjustments are required. Any clients I work with that hedge use a 3rd party app to track the hedging and then make manual Journal entries in GP after the fact.

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MG-16101311-0 26,225 on at

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You do not want to go down the path of setting up exchange rate tables for each PO. That would be extremely cumbersome to maintain - not to mention purging these from the system. I don't really know that there's a practical solution to this, besides a customization. Said customization would hold the PO, the currency ID, and the exchange rate and would add that exchange rate to the receipt transaction when a receipt is performed. It's a fairly simple customization to do.

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Andrew John Dean 1,337 on at

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Hi Spencer

There is a startup company www.currencyvue.com that is developing something along the lines of what you are trying to achieve. They provide a cloud-based solution that imports transactions from an ERP, and allow those transactions to be hedged. The application is in beta and hope to have the product ready by mid-year. They are working with me to provide the GP connector to the solution.

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