Multi-Currency

Multi-Currency in Sage One is an add-on module which allows companies to price any goods or services in foreign currencies for example United States Dollar or British Pound Sterling etc.

Should you wish to use the Sage One Multi-Currency add-on module, hereinafter referred to as Multi-Currency, you need to create, check and adjust a few system variables in order to accommodate it.

Remember when you are using Multi-Currency you will need to do some research with regard to your industry’s tax laws, customs and other related import and export activities.

Setting up Multi-Currency

Companies must have Multi-Currency enabled under Company Settings in order to use this functionality.

1. To activate Multi-Currency, select Company…Change Company Settings.

2. Select the Multi-Currency tab.

Multi-Currency is an add-on module. To get access to this feature, please contact the Sage One Sales Team.

3. Select the Enable Multi-Currency check box to activate Multi-Currency. You are also required to select your Home Currency in the Select your Home Currency drop down menu.

4. Click on the Save button to activate Multi-Currency.

5. The following screen will be displayed:

Setting up other currencies

Once you have activated Multi-Currency and selected your Home Currency, you can then create or set up other currencies.

1. Click on the Add Currency button to create a new currency.

2. Select the currency that you wish to add and click on the Add button.

3. Click on the Save button to save your changes.

Changing your Home Currency

You can also change the Exchange Rate for a currency by clicking on the edit link next to the currency.

Currencies are maintained for each day and can be accessed using a date picker. Exchange rates are stored in the Sage One Database for each day as 1 Home Currency to xxx Foreign Currency for example the exchange rate will display both the exchange rate and the inverse rate (R1 = $0.084)($1 = R12.55).

If you select to change your Home Currency, then you will have to add all the currencies again.

You cannot change your Home Currency after you have processed transactions in foreign currencies.

Editing a Currency

You are able to change the Exchange Rate for a currency by clicking on the edit link next to the currency:

If you want to add your own customised exchange rate, select the New Custom Exchange Rate option.

Enter the dates that you want Sage One to use for the customised exchange rate and enter the new exchange rate. Click on the Update button to save the custom exchange rate.

The following message will be displayed only if a date range was selected:

Click the OK button to confirm your custom exchange rate. Sage One will create a comment on the Comments line that the rates were changed by the user.

Enabling Multi-Currency on Masterfiles

  • The following Masterfiles will have a Multi-Currency option:
    • Customers
    • Suppliers
    • Bank Accounts

Once a Masterfile has been assigned a currency and has activity you will be unable to change that currency.

All values on the Masterfile for example opening balance, balance, etc. will display in the Masterfile currency and the related currency symbol will display. This includes:

  • Activity
  • Graphs
  • Listing
  • Quick Views

Setting up a Customer

Your customers have to be linked to a foreign currency, otherwise you will not be able to trade correctly in the system. Not doing so will result in inaccurate financial information.

1. To create a Multi-Currency customer, select Customers…Add a Customer.

2. Under the Details tab, select the Currency for the customer:

3. As soon as the currency is selected, the other fields will automatically change to the selected currency:

The exchange rate on your opening balance date will be used to convert your opening balance into Home Currency.

Setting up a Supplier

Your suppliers have to be linked to the foreign currencies, otherwise you will not be able to trade correctly in the system. Not doing so result in inaccurate financial information.

1. To create a Multi-Currency supplier, select Suppliers…Add a Supplier.

2. Under the Details tab, select the Currency for the supplier:

3. As soon as the currency is selected, the other fields will automatically change to the selected currency:

The exchange rate on your opening balance date will be used to convert your opening balance into Home Currency.

Setting up a Bank Account

If your company trades with an offshore bank account, over and above your local bank account you will need to create this foreign bank account.

1. To create a Multi-Currency bank account, select Banking…Add a Bank or Credit Card.

2. In the Currency field select the currency that the bank account must be processed in:

Processing with Multi-Currency

Processing Multi-Currency on Documents

1. You will process as normal in Sage One:

2. Select the foreign customer or supplier. You will notice that an extra field will be displayed on the processing document:

The Exchange Rate field will offer:

  • The exchange rate will be populated from the Company Settings
  • An editable field which will apply a custom rate
  • Inter-changeable to show the exchange rate and inverse rate
  • A Change Rate popup to allow a user to select the latest rate, set a custom rate and even update the custom rate for all transactions going forward for a date range:

3. When processing in the lines, there is a Home currency column displaying the amount processed in your Home Currency.

4. The Total (Home) field will also display the document total in Home Currency:

Other Important Information

  • When a foreign currency customer or supplier is selected then the Multi-Currency fields will become available – these should not display for Home customers and suppliers.
  • The customer or supplier balance and credit limit will display the correct currency symbol.
  • Item Selling Prices and Item Costs will be converted into foreign currency on the documents using the exchange rate in effect on the document.
  • Item average cost and last cost will be updated with the converted Home Currency value of the item on the document.

Linking Credit Notes and Supplier Returns to Invoices

If a Credit Note or Supplier Return is linked to a Customer Tax Invoice or Supplier Invoice respectively, the exchange rate from the underlying invoice document will be applied to the Credit Note and Supplier Return, regardless of the date of the new document. This exchange rate will remain in effect even if you change the date on the new document.

This is to ensure that the Home Currency equivalent of a Credit Note or Return matches that of the original invoice.

Foreign Currency Gains and Losses

There are three new system accounts in Sage One to handle the effects of Multi-Currency:

  • Forex Gains/Losses – Banks
  • Forex Realised Gains/Losses
  • Forex Unrealised Gains/Losses

Forex Gains/Losses – Banks

The Forex Gains/Losses – Banks system account is used to account for the change in Home Value of any foreign bank accounts due to exchange rate changes.

Effect on: This only arises if there are foreign bank accounts.

Calculation:

For current year transactions, the difference between:
(1) Home Value of foreign bank accounts (at reporting exchange rate)
(2) And, the converted home value that arose at the time of the transaction (using the transaction exchange rate)

Forex Gains/Losses – Banks is a profit and loss account – which means that gains and losses are only calculated for a specific financial year. Thereafter, they are written to Retained Income.

Any transactions that are contained in the foreign banks opening balance, in other words, transactions that occurred last year, also result in a revaluation.

For prior year transactions, the difference is between:
(1) Home Value of foreign bank accounts (at reporting exchange rate)
(2) And, the converted home value at the beginning of the financial year (using the exchange rate at the beginning of the year).

Forex Realised Gains/Losses

This system account is used to account for the difference between the value of your customer and supplier documents at the date they were issued and the value of the money received when these documents are settled.

For example, if you sell $ 100.00 worth of goods to your customer at an exchange rate of R 12 : $1 then you are expecting to receive R 1,200.00 from them in your Home Currency.

However, when your Customer pays you the $100.00 the exchange rate could have moved to R 13 : $1 for example. This will be recorded in your financial records as a receipt for R 1,300.00. The difference due to the exchange rate change will be recorded as a R100 gain in the Forex Realised Gains/Losses system account.

Effect on: Will arise when you have foreign customers and suppliers in Sage One.

When it will arise: Only once the customer has paid (i.e. Document has been allocated). Sage One deals with allocations of documents, only once a document has been allocated (for example a customer receipt is allocated to a customer invoice) will a realised gain arise.

Calculation:

For current year transactions, the difference between:
(1) Home Value of customer or supplier transaction (at transactions exchange rate)
(2) Home Value of the allocated document (for example a receipt) at allocated exchange rate.

Forex Realised Gains/Losses is a profit and loss account – which means that gains and losses are only calculated for a specific financial year. Thereafter, they are written to Retained Income.

Any transactions that are contained in the customer or suppliers opening balance, in other words transactions that occurred last year, also result in a realised gain or loss if they are only allocated in the current year.

For prior year transactions, the difference between:
(1) Home Value of customer or supplier transaction at the beginning of the year (at financial year start exchange rate)
(2) Home Value of the allocated document (for example a receipt) at allocated exchange rate.

Forex Unrealised Gains / Losses

This system account is very similar to the Forex Unrealised Gains / Losses with the only difference being that an allocation has not been made, in other words money has not yet been received.

It is used to account for the difference between the value of your customer and supplier documents at the date they were issued and the value of these same documents at the current exchange rate (i.e. The current expected value in home currency).

For example, if you sell $ 100.00 worth of goods to your customer at an exchange rate of R 12 : $1 then you are expecting to receive R 1,200.00 from them in your Home Currency.

However, if you run a report today the $100.00 is still owing but the exchange rate could have moved to R 11 : $1 for example. The customer balance will be recorded in your financial records as R 1,100.00. The difference due to the exchange rate change will be recorded as a R100 loss in the Forex Unrealised Gains / Losses system account.

Effect on: Will arise when you have foreign customers and suppliers in Sage One.

When it will arise: Only on unallocated transactions when the exchange rate has changed between the document date and the reporting date.

Calculation:

For current year transactions, the difference is between:
(1) Home Value of customer or supplier transaction (at transaction’s exchange rate)
(2) Home Value of customer or supplier transaction (at reporting exchange rate).

Forex Unrealised Gains / Losses is a profit and loss account – which means that gains and losses are only calculated for a specific financial year. Thereafter, they are written to Retained Income.

Any transactions that are contained in the customer or supplier opening balance, in other words transactions that occurred last year also result in an unrealised gain or loss if they are only allocated in the current year.

For prior year transactions, the difference between:
(1) Home Value of customer or supplier transaction at the beginning of the year (at financial year start exchange rate)
(2) Home Value of customer or supplier transaction (at reporting exchange rate).

Once a transaction has been allocated (or realised) the unrealised gain / loss will no longer appear in this account. For movement purposes it will move from Forex Unrealised Gains / Losses to the Forex Realised Gains / Losses system account.

Multi-Currency Reporting

Financial reports and most other Sage One reports have the foreign currency ability where you can convert the total amounts into Home Currency.

Most of the reports in Sage One will pull through Multi-Currency for your specific foreign customers or suppliers:

Click on the View Report button:

The following is a list of reports which are available in foreign currency: