#Currency Exchange Rates

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Posted on by Jaunt

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Hi Everyone,

I'm new to Currency Exchange Rate functionality in Business Central. So kindly help me to understand its purpose.

My local currency is USD. For me, other currencies are foreign currencies. Also, I have listed down my queries below.

1. In General Ledger Setup, I have assigned USD as my Local Currency. Can I keep the LCY code empty instead of assigning the USD?

2. How to record exchange rate manually for currencies (For example, CAD)?

Currency Code: With which currency code I'm going to do the transaction.

Relational Currency Code: Does this column denotes my local currency?

Exchange Rate: How should I fill this column?

Relational Exchange Rate Amount: How should I fill this column?

According to my understanding, I will fill 1.00 CAD at Exchange Rate Column and 0.80 at Relational Exch. Rate Amount. Am I correct here?

3. What is the purpose of Adjustment Exch. Rate Amount and Relational Adjmt Exch Rate Amount columns? When it will be updated?

4. At the end of every month should I run any batch job related to currencies?

Kindly enlighten me with your experience and knowlege.

Thanks & Regards

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Dynamics 365 Business Central

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Gavin 2,508 on at

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Hi,

I've written a couple of articles on this subject that may be of use to you.

http://thedynamicsexplorer.com/2021/02/26/dynamics-365-business-central-making-sense-of-the-currency-exchange-rates-page-when-setting-exchange-rates/

This one below is a comparison between Business Central and Dynamics GP but may provide some pointers

http://thedynamicsexplorer.com/2020/09/02/dynamics-gp-vs-dynamics-365-business-central-multi-currency-revaluation-adjust-exchange-rates/

I hope this helps.

Thanks

Gavin

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Revan,

As an Accountant and BC Implementor, in General Ledger Setup, always setup the LCY like my example for USD below:

Now talking about what Currencies you will have within your company here is an example for a few:

Currency Code = The 3 letter code used internationally

ISO Code = The 3 letter code from ISO Currency - www.iban.com/currency-codes

ISO Numeric Code = 3 digit code from ISO Currency - www.iban.com/currency-codes

Realized Gain, Losses, Unrealized Gain and Losses Account - You enter the G/L Account, from Chart of Accounts, you have created/use

Exchange Rate entry, using CAD and CHF examples:

To enter the Exchange Rate Amount = 100.00, Relational Exch. Rate and Adjmt. Exchange Rate Amount if the rate converting to USD. I will use Floatrates.com to get the value. Enter the value you have in the listing for the Currency converting to USD. In the screen shot below, I would enter 0.79521 for 4/4/21.

Now to make your life easier, yo could setup Floatrates.com to auto update the Exchange Rates daily. It is a free service. Her are the steps:

Search for Currency Exchange Rate Service and add a new one. Below example is using USD feed.

If you want the inverse rate, you can setup the line part as below image.

When you enable the Currency Exchange Rate Services, it will automatically create a job queue entry. Go to that job queue entry and you can setup the schedule to update daily.

Note that you can only import today’s rate with this setup. You can’t import past rates.

Hope this helps.

Thanks,

Steve

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Jaunt 184 on at

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Hi Gavin Whittaker & Steven Chinsky,

My apologies for acknowledging your responses to this late!

Your answers helped me a lot. I really thank you people for sharing such valuable information with me.

Thanks & Regards,

Jaunt

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vuemacgeorge 15 on at

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Jaunt 184 on at

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Hi Everyone,

I have configured the currencies and exchange rate services in Business Central. But I would like to know the purpose and importance of Adjust Exchange Rates batch job.

Kindly share your thoughts on this.

Thanks in advance!

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Community Member on at

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Revan,

Adjust Exchange Rates task can be run to update open subledger entries with current currency exchange rates. The adjustment will lead to a more accurate picture of the unrealized gains and losses of foreign currency transactions. At the end of each month, part of your month-end Accounting close process, you would Adjust Exchange Rates to reflect current exchange rates and an accurate unrealized gain/loss of the transactions.

Thanks,

Steve

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Jaunt 184 on at

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Hi Steven,

Thank you for sharing the valuable information!

I have scenario where the sales order is created for a customer in UK and my company is in US.

I have created a sales order on 25th August 2021.

Sales Order Value : $ 1500.00 (1090.33 Pounds).

Exchange Rate : 1US = 0.73 Pounds

I have also invoiced it on the same day.

If run the "Adjust Exchange Rates" report on 31st August 2021, what would be the behaviour?

Can you please enlighten me on this? I have tried it from my end but I couldn't see any changes.

Thanks in advance!

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Revan,

If you ran the Adjust Exchange Rate function with a date of 31/08/21 and you have entered an exchange rate for 31/08/21, on the Option page you will Click Adjust Customer, Vendor and Bank balances. What will happen is an entry will be made recording an Unrealized Gain or Loss, depending on the 31/08/21 Exchange Rate and the Customer Balance will be DB/(CR) and the offset booked to Unrealized Gain/Loss on FX DB/(CR).

Thanks,

Steve

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Jaunt 184 on at

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Hi Steven,

Thank you for the information!

Now I'll try out with multiple scenarios. In previous scenario, I failed to update the exchange rate for 31/8/2021.

Thanks,

Revan

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vuemacgeorge 15 on at

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