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CMS Multi-Currency

Benefits

The Multi-Currency module can be optionally added to CMS, providing support for CMS users who conduct business in multiple currencies. Multi-Currency features allow you to create and manage currency conversion tables, currency-specific customer price records, and to record transactions throughout CMS in currencies other than statutory currency. (The currency used for your company's general ledger is called the 'statutory' currency.)

Product Summary

When the Multi-Currency module is installed, currency data can be captured in conjunction with sales orders, accounts receivable (A/R), purchase orders, and accounts payable (A/P) transactions. The captured monetary values are posted to the General Ledger (G/L) and to inventory in statutory currency; the external documents (sales orders, purchase orders, etc.) show the monetary values in transaction currency (the currency used for the transaction is the transaction currency), and the system saves both the statutory and the transaction values on file. If a currency gain/loss occurs, it is posted when the transaction is completed.

The module also provides:

• Temporary posting of unrealized transaction gain/loss for fiscal reporting purposes.
• Automatic reversal of these temporary gain/loss postings.
• Foreign currency exposure reporting for open transactions (sales, A/R, etc.)
• Net exposure reporting per each currency.
• Currency fluctuation reporting.
• Multiple currency exchange rate tables for Purchasing, Sales, etc.

Currency Set-Up

The design of the Multi-Currency module provides ease of set up. After set up, all CMS transaction entry programs will prompt for currency information. Set up steps include definition of currency codes and exchange rates.

Currency Codes

Codes are used to identify the currency of a transaction. When a transaction is entered, the system prompts for a currency code allowing the operator to either manually enter the code or select from a list of valid codes. The system stores the following information for each currency code:

• Code description up to 4 characters in length.
• Information that controls the printing characteristics of the monetary values. For example, the number of positions to print, the position of the decimal, and rounding information.
• The G/L account to which any gain/loss is posted.
• The system allows you to record the default currency for each customer so that when a transaction for a particular customer is entered, that customer's currency code defaults into the document. The default currency may be overridden, if desired.

Currency Conversion Factors

While the monetary value of a transaction is captured in the transaction currency, the equivalent value of the transaction is posted to the G/L in statutory currency. conversion factors are used to convert transaction currency values to corresponding statutory currency values.

Conversion Methods

The conversion between each foreign currency and your statutory currency can be expressed in either of two ways: as a fraction of the statutory or as the number of units of the foreign currency equaling one statutory unit. The conversion factor between the statutory and each foreign currency allows the system to calculate the conversion between any two currencies.

Customer Pricing

Two methods of determining customer prices are supported. You can either define special price books for foreign currencies or allow the system to use the conversion factors to calculate the appropriate foreign currency price:

• Currency-specific price books record prices for your products in each foreign currency
• Exchange rates for the foreign currencies can be used for pricing

Currency Shadow Files

The transaction currency data is stored in a series of 'shadow files' that supplement the content of the normal CMS transaction data files. Multi-Currency data is only stored in these files if the transaction is in currency o9ther than the statutory currency.

Currency Gain and Loss

If there is a difference between the exchange rate at the time of the order and the exchange rate at the time of the payment, the system determines the monetary value of the difference in the statutory currency and posts the value to the appropriate gain/loss G/L account.

Reporting

The multi-currency functionality provides both foreign currency exposure reporting and financial statements that indicate projected gain/loss.

Exposure Reporting

Multi-currency reporting shows your company's financial exposure in foreign currencies. The areas of exposure can be selected from any or all of the following: Purchase Orders, Receiving, Accounts Payable, Sales Orders, Shipments, and Accounts Receivable. You can report on all foreign currencies or up to eight individual currencies, reporting within up to eight time periods in detail or summary format.

Through this reporting, you can anticipate your cash flow in various currencies over time. Information like this will aid in currency buying and selling decisions as you consider future currency fluctuations.

Financial Statements

Some companies prefer to see unrealized transaction gain/loss data on financial reports. This preliminary posting information must be extracted from the system and posted to the G/L prior to generating the financial reports. This is because gain/loss postings do not actually occur until a transaction has been settled.

CMS provides a procedure for posting the current gain/loss for as-yet-uncompleted transactions to the G/L. You later reverse these entries. The system uses its transaction information to derive an estimated gain or loss. It then allows you to review this information before temporarily posting it to the G/L. When the procedure is complete, you can run the necessary financial reports. The system automatically reverses the temporary gain/loss information of the G/L at period closing. Reversals can also occur prior to period closing, if desired.

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