Introduction to Multi-Currency in Standard ERP

In Standard ERP, you can record any accounting transaction in any currency. You can maintain a register of Currencies, and keep a history of their respective Exchange Rates for different dates is maintained. You can assign separate Sales and Purchase Currencies to each Customer and Supplier: the ones in which they will be invoiced and in which they issue their Invoices respectively. When you issue or receive a Sales or Purchase Invoice, its value will automatically be converted from the foreign to your home Currency, and all necessary accounting transactions will be created. Accounts receivable and payable can be reported in either Currency.

Two Currency conversion methods are provided. You can use either of these methods exclusively, or you can use them in combination, depending on your requirements. The first method is the simple conversion from a foreign Currency to your home Currency, applicable to the majority of worldwide Currency transactions.

The second method is the dual-base triangulation system, termed the "Dual-Base system" in these web pages. Users of this system fall into two categories:

The Dual-Base system will be useful for companies that have offices in two countries that need to report in both Currencies, and for companies operating in countries where there is a second Currency (usually the US Dollar or Euro) in common use in addition to the national one.

The Dual-Base system will also be useful in countries passing through the process of replacing their home Currencies with the Euro. A requirement of this process is that the value of every transaction should be expressible in both the home Currency and the Euro. Direct conversions from the home Currency to any foreign Currency except the Euro are not possible. Instead, the home Currency should first be converted to the Euro, and there should then be a second conversion to the foreign Currency. At the time of writing, there were no countries undergoing the transition process.
The term "Euro zone" has been used in these web pages to refer to those countries that have completed the transition process described above and use the Euro as their Currency. Companies in these countries should use the simple conversion system, unless they are retaining their old national Currency for comparison purposes. In this case they fall into the "voluntary" category described above.

"Transitional" users should use the Dual-Base system exclusively, in order to comply with European Monetary Union (EMU) rules, while "voluntary" users can be more flexible, using Dual-Base and simple conversion systems in combination as required.

Companies outside the Euro zone but trading with it have the choice of using the simple conversion system or the Dual-Base system. This choice will depend on the volume of trade with the Euro zone and on whether they need the ability to produce all reports in both their home Currency and the Euro. Such a use of the Dual-Base system falls into the "voluntary" category described above.

Similarly companies outside the Euro zone and trading with "transitional" countries can choose whether to use the simple conversion system or the Dual-Base system.

Please refer to the following pages for more details about using Currencies in Standard ERP:

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