Multiple Currency Costing

Purpose

A multicurrency system allows all reports to be in the same currency throughout the organisation or for a Site. On Key operates as a multicurrency system if the system option Display Multiple Currency Fields is selected on the System Options - General tab.

Where to find

Currencies are configured when the system is installed using the Financials - Currencies menu option.
System Options are set using the Shared Configuration - System Option menu option.
Sites are added using the Shared Configuration - Sites menu option.
Suppliers are added using the Material Manager - Stock Configuration - Suppliers menu option.

On Key Currencies

On Key uses three currency fields to cater for multicurrency systems.

Base Currency used by the organisation
Site Currency used by the Site
Transaction Currency used by the Supplier or Warehouse.

Base Currency

The Base Currency for an organisation is specified on the System Options - General tab.

In a multicurrency system, Monetary values for Issues, Returns and a Work Order’s Labour Used and Ad Hoc Costs are stored in the Base Currency. That is, the transactions that appear on the Work Order Costing window are stored in the Base Currency and displayed in the Site Currency.

Everything is stored as Base Currency in the database and user has the option to display the Base Currency by adding the column under the Query Builder’s Columns.

Reports can be printed in the Base Currency.
The Annual Budget, Actual expenses and Variance for a Cost Centre and Cost Element at a Site in a Financial Year are displayed in the Base Currency.

Site currency

The Site Currency for a Site is specified on the Site - Settings tab and defaults to the Base Currency specified for the organisation.
The Site Currency is used by a Site for:
Reports; the values of different transactions are reported in the same Currency for each Site
Costing
The Rates for each Trade
The Rates for each Staff Member, which are the Rates for the Staff Member’s Trade converted into the Site Currency of the Site where the Staff Member works.
The Currency for approval amounts for each User.
The Annual Budget for a Cost Centre and Cost Element in a Financial Year at a Site.
The Average item cost for each Stock Warehouse Item
The Unit Profit Currency for each Product.
The Unit Profit Currency for Products produced by an Asset or Asset Type appears on the Asset Products tab and Asset Type Products tab. [OK5R5]
The Unit Cost Currency for each Meter.

Transaction Currency

The Transaction Currency is the Currency of the Invoice received from the supplier or source of the goods or services for an On Key transaction.

The Transaction Currency can be:
The Supplier Currency for purchases from or returns to a supplier, which is the Default Currency specified on the Supplier - Details tab. The Supplier Currency and the Site to Base Conversion Rate can be changed for a transaction.
This does not apply to returns and credit notes, where the values are based on Issues and Returns.
The Warehouse Currency for Stock Items issued by or returned to a Warehouse.
The Supplier Currency or an Asset’s Site Currency for Contractor and DP Items.

Transaction Costing

Every On Key transaction in a multicurrency system includes these generic fields:

Transaction Currency (Warehouse Currency or Supplier Currency)
Item cost in Transaction Currency
Total cost in Transaction Currency

Transactions that appear on the Work Order Costing window (Issues, Returns and a Work Order’s Labour Used Costs and Ad Hoc Costs) include these additional fields:

Base Currency
Site to Base Conversion Rate
Item cost in Base Currency
Total cost in Base Currency

Please note!

When a transaction or a record that includes a Currency is captured, then the Currency’s conversion rates from Site Currency and Transaction Currency into Base Currency must exist on the Currency Rates table.
The latest Conversion Rate for a Currency is used when a transaction is captured.
Conversion rates for Currencies can be imported every day.
Maintain currency Conversion Rates regularly to avoid operational hiccups.
The Currency for a Warehouse or Asset, and all items based on the Asset, is determined by the Site where the Warehouse or Asset is located.
The Warehouse Currency and Site Currency can be different for Requisition and Purchase Order Stock Item transactions.

Business rules

The Rates Currency for a Staff Member is determined by the Site where the Staff Member is employed, which is specified on the Staff Member edit window’s header.
The Rates Currency for a Trade is determined by the Site that is specified on the Trade edit window’s header.
The Approval Amounts Currency for a User is determined by the Site where the User is employed, which is specified on the User edit window’s header.
The Unit Profit Currency for a Product is determined by the Site that is specified on the Product edit window’s header.
Purchase Order Stock Item transactions have Warehouse Currency, Supplier Currency and Site Currency (no Base Currency).

Best Practice

If the Conversion Rate captured for an item or transaction is outside the specified variance on the Conversion Rates table then an appropriate message appears and the Conversion Rate is not accepted. This could lead to inaccurate costing.

To avoid inaccurate costing:

1. Add the Conversion Rate to the Conversion Rates table.

2. Repeat the process; the new Conversion Rate will be displayed.

3. Save the item or transaction.

- Example -

The latest Conversion Rate between USD and ZAR is 6.5, and the Conversion Rate Variance % is 15%. The Receipt for goods from a supplier specifies an exchange rate of 5.7.

When “5.7” is entered for the Supplier-Site Conversion Rate on the Receipt Transaction, a message advises the user that the Conversion Rate is outside the variance specified for the latest Conversion Rate for these currencies.

If the transaction is accepted with the “out of date” conversion rate then the costing will be inaccurate.

At this stage, add conversion rates to the Conversion Rates table (for the “ZAR” to “USD” conversion and the “USD” to “ZAR” conversion), refresh the Receipt edit window so that the new conversion rate is displayed, and save the Receipt.

Changing from Single Currency to Multi Currency

The system must be set up to change from a single currency system to a multiple currency system.

1. Tick Display Multiple Currency Fields and select the Base Currency on the System Options - General tab.

2. Update every Site to specify the Currency on the Site - Financials tab.

3. Update every Supplier to specify their Default Currency on the Supplier - Details tab.

4. Add Conversion Rates between the Currencies that are used by all Suppliers and all Sites, and for Sites to the Base Currency.
For example, if the Base Currency is “USD”, the Site Currency for the organisation’s Sites is either “ZAR” or “EUR”, and Suppliers operate in “USD”, “EUR” and “ZAR” then add conversion rates between the currencies.

To identify the required conversion rates, draw up the following table and map the current conversion requirements.

Supplier	Site	Base
“USD”	“ZAR”
“USD”	“EUR”
“ZAR”	“EUR”
“EUR”	“ZAR”
	“ZAR”	“USD”
	“EUR”	“USD”