The Integral Accounting Enterprise System supports multi-currency processing. However, in order to receive the full benefit of the multi-currency feature, and to ensure accurate reporting, steps must be taken to set up the system properly. Follow the procedures outlined below to correctly set up and use the multi-currency feature in the Integral Accounting Enterprise system.
1. Confirm the default currency for the company.
The default currency is selected during the company setup process. Therefore, this step will confirm that the proper default currency is selected in the company screen. To do this go into System Setup then Company Setup then click Company Setup again. Select your company from the list and click on the pencil to edit/view the company. Once the Company screen loads, click the Defaults tab at the top of the screen. This will bring up the default settings for this company.
The first line is the Currency ID which determines the default currency for this company. This should already be selected to the native currency that your company does business in. If not, select the proper currency from the drop down list.
If your company/division/department does not need or use the multi-currency feature, then there is nothing more that needs to be done. Otherwise, follow the steps below to set up the system for multi-currency accounting.
2. Determine the GL Account for the Currency Gains and Losses
The Integral Accounting Enterprise system is shipped with default data. Included in the default data is a Chart of Accounts (CoA) which includes a realized and unrealized default GL Account for the Multi-Currency feature. If your company is going to use the default GL account that comes with the system, then you can skip this step and proceed to step 3. If your company is going to use a different GL Account for the Currency Gains and Losses, then set up the new Currency Gain and Loss account at this time. Refer to the user manual under the section titled General Ledger for more information on setting up a new account in the General Ledger.
3. Select the default GL Accounts for the Currency Gains and Losses
In this step, you will select the General Ledger Accounts for the Currency gains and losses. From the Company Setup screen, click the Accounts tab. This will bring up the screen with a list of default accounts for the Company. The GL Currency Gain Loss Account can be found towards the bottom of the list. The default account of 490000 Realized Gains and Losses should already be selected for this account. If this is not the account you want to use, or if you created your own, then select it from the drop down list .
Next, select the GL Currency Unrealized Gain Loss Account. It is located immediately under the GL Currency Gain Loss Account and has 491000 Unrealized Gains & Losses selected as the default account. If this is not the account you want to use, or if you created your own, select it from the drop down list.
When you have finished selecting the default GL Accounts for the Currency Gains and Losses, click OK to exit the Company Accounts screen.
4. Enter the Currencies into the Currencies Table
Now that the accounts have been set up for the currency, the next step is to enter the currency values into the currencies table. You should enter the rates for all of the currencies that your company expects to conduct business in. The Integral Accounting Enterprise system is shipped with a small list of foreign currencies and sample currency exchange data only. To enter additional currencies and the current exchanges, go into the System Setup option from the main menu, then Company Setup. From there, click on the Currencies option and that will bring up the list of currencies entered into the system.
To enter a new currency record, click the New button at the top of the screen. A screen will come up where you can enter the information for a new currency record.
To edit an existing currency record, click the edit button (the pencil) next to the currency record to bring up that currency's record. From there, you can edit the current exchange of the currency.
Note: The currency exchange rates that are shipped with the system are SAMPLE rates only. They are not accurate nor current and MUST be changed prior to use.
You can manually update the currency exchange rates on a regular basis or as often as your company sees fit.
Note: There is no automated method to update the currency exchange rates. The only way to update them and ensure they are current and accurate is to update them manually.
There are many different ways of obtaining the current currency exchange rates and you should use the method that works best for you. XE.com (http://www.xe.com) is free a website that has the current currency exchange rates in real-time with an automatic refresh of the page every few minutes. You can also sign up for their email subscription service to receive the currency exchange rates daily by email.
Each time the currency exchange rates are changed, the old rate and the date the rate was changed will automatically go into the Currency Rates History Table. If you enter a transaction for an older date, the system will automatically use the rate from the Currency Rates History Table as of the transaction date, even if the date is in the past. For example, if a transaction was entered on March 15, 2004, but the date on the transaction is entered as March 1, 2004, the system will select the currency exchange rate from the Currency History Table as of March 1, 2004.
In any event, the system automatically uses the most current exchange rate as of the transaction date entered in the system.
Note: In following with GAAP Compliancy, currency amounts are set to and converted to the company default currency at the current exchange rate before posting.
5. Set up bank and General Ledger accounts as needed for the currencies
After the current currency exchange rates are entered into the Currencies Table, the next step is to create a separate bank account and a separate General Ledger cash account in the system for each of the currencies that your company deals in. Each of these bank accounts should point to a cash account in the General Ledger.
You would set up the bank accounts in the company setup screen just as you set up all the other bank accounts. Additionally, you would set up the General Ledger Cash accounts just as you set up other General Ledger accounts.
For more information on setting up bank accounts and General Ledger accounts, please refer to the section titled Banking under General Ledger and General Ledger Posting Guide, respectively, in the User Manual.
You have successfully completed setting up the multi-currency feature of the Integral Accounting Enterprise system. The rest of the steps are automatically handled by the system. When entering transactions, be sure to select the proper currency from the Currency ID drop down lists. The system will automatically complete the current exchange rate when the transaction is entered. When the transaction is paid, or cash is received for that transaction, the system will calculate the rate and make the proper posting to the Realized Currency Gain / Loss account in the Chart of Accounts.