Automated Accounting Part 9, Foreign Currency Transactions

Our goal today is to post transactions in a foreign currency and automatically record the exchange rate on a transaction.

D365 can process transactions in any currency.

Voucher lines will display two currencies:

• Amount in transaction currency

• Amount (Amount in accounting currency)

Both currencies are synchronously reported on posted transaction voucher lines.

1. Exchange Rate Types

Create a default Exchange Rate Type as exhibited.

General ledger > Setup > Currencies > Exchange rate types

General ledger > Ledger setup > Ledger > Currency (fast tab)

Obtain your daily rates from your preferred provider.

I personally like Oanda to obtain my daily rates. If you go to the website, you can gather daily rates for free.

One Time Setup

Create a default Exchange Rate combinations as exhibited (1).

Make as many combinations as your business needs.

I choose example combinations for:

• CAD

• EUR

• USD

Conversion factor of 100 allows for more decimal precision

Daily Rates

On a daily basis, select each rate combination(1), then create daily rates as exhibited (2).

Repeat this for each rate combination(1),

General ledger > Setup > Currencies > Currency exchange rates

Instead of manually gathering and keying daily rates, you can contract with the provider of your choice, to automatically import the daily rates (most sites charge a fee).

After you obtain the API key from you provider (i.e. Oanda.com), then perform the following setup.

First, select your provider.

General ledger > Setup > Currencies > Configure exchange rate provider

Third, set a batch job to import the daily rates on a nightly basis.

Select desired parameters.

• Exchange rate type

• Exchange rate provider

• Import as of

Choose Run in background to define recurrence (i.e. daily at 8:00 PM).

General ledger > Setup > Currencies > Import currency exchange rates

Now we are ready to use what we have configured to automatically assign foreign exchange rates to our transactions.

We will exhibit a General Journal, but the functionally works the same for journals in other modules (i.e. Accounts Receivable and Accounts Payable).

We are going to post a $126.55 Canadian dollar (CAD) transaction in a US Legal entity that has the accounting currency set to USA dollar (USD) on 2/17/2021.

The exchange rate will automatically populate based on the chosen transaction currency (CAD) in relation to:

• transaction date (2/17/2021)

• accounting currency (USD)

General ledger > Journal entries > General journals

100.00 USD for the Accounting Currency, and

126.55 CAD for the Transaction Currency.

We have successfully automatically populated the Journal Lines with the accurate exchange rate and Voucher with accurate currency amounts.

Jim Sonne