Multicurrency in Dynamics GP

There are a lot of things to think about when doing Multicurrency in Dynamics GP. During this recorded webinar, learn how to setup currency, rates, and revaluation. We discuss realized vs. unrealized gains and losses, show how to do setup runs for subledgers and cash, and balancing at month end.

Topics discussed during this session include:

• Introduction and Agenda – 0:50
• Multicurrency – 2:40
  • Currency Setup
  • Rate Setups
  • Accounts by Currency
  • Financial Defaults
• Revaluation – 11:30
  • Setup
  • Realized vs Unrealized
  • Setup of Runs for
    • Subledgers
    • Cash
  • Monthly balancing
• Q&A – 26:30

The intended audience for this video is existing Dynamics GP users.

Contact us if you have any questions about Multicurrency in Dynamics GP.

Transcript below:

Tess: Hello, everyone. And thank you for joining us today for our Dynamics GP Coffee Break about multicurrency. My name is Tess, and I’m the facilitator today. If you have any questions during the presentation, please type them into the Questions area in the control panel on the right-hand side of your screen, and we’ll answer your questions at the end. The session will be recorded and will be posted on our blog later this week. So, I’d like to introduce you to Don McNulty, who is a solutions architect on our Dynamics GP team here at Encore. So, Don, over to you.

Don: All right. Well, good morning, everyone. Well, potentially afternoon if you’re up on the East Coast. So, today’s topic is gonna be on multicurrency, about a few things to do quickly, so I will get going with this. So, myself, I’m a solutions architect with Encore, as Tess said, I’m responsible for planning and deploying different products within GP.

Today we’re gonna talk about multicurrency, lots of little things to think about when you’re doing multicurrency. There’s the currency setup, the rate setups, the accounts by currency, and the financial defaults. I will take very little time on those. I’ll flash through them fairly quickly in the demo to show you, kind of, what we’re looking at and what we’re looking for.

Then there’s the balancing at month end. There are two types of assets that we need to revalue in most people’s cases. We are revaluing monetary assets, which are your cash accounts receivable, accounts payable, you probably won’t be revaluing any of your historical assets, which are your non-monetary, and you’re probably not revaluing anything on your income statement.

And inside there, there are two types: there’s the realized and the unrealized. And the realized ones are the ones on the cash account. Great Plains does not auto-recognize foreign exchange being lost on cash accounts, it does auto-recognize foreign exchange being lost on accounts receivable and accounts payable, so those two become unrealized claims and losses. So, that’s the differential there. So, the two setup runs that we’ve got is we have to run one for the subledgers and one for cash. And then I’ll talk a little bit about how we’re supposed to balance our accounts so that we know that we’ve got the correct information.

So, without too much more, I will pop over to a demo and close this. Close that. All right. So, underneath the…when we start the system, go into Currency underneath the Setup, underneath the System, we have three toggles that we need to be concerned with. And they are these ones inside here. We don’t worry about the Euro Relationships, that was done when the euro first came into play, back in the ’90s. So, we don’t need to worry about those, but the top three, we do. Underneath the currencies, we have different currencies that we can assign. These are the demo currencies. Hopefully, if you are using multicurrency, that you are using the CAD and USD, which are the two that I’m going to be talking about today.

Now, I just want a little setup for this, is that this is my functional currency in my demo environment, all my data is in U.S. dollars. And then on the flip side of that, I’m going to be dealing with the Canadian dollar accounts for the multicurrency. So, in most people’s cases, in Canada, would be opposite to that, but they would be the same here in our…in the States.

Once we set the currency up, the next thing that we have to do is we have to set up the exchange table. When we set up the exchange tables, we have different ones, and I’m gonna talk about the average one. So, we’ve got it. Do we multiply, do we divide? Previous data, things like this. And then from there, we can also select our different rates. And right now I’m in 2027, and I got it set at 0.75 for this month, I’m dealing with April 2027, as you can see down below, 4/12/2027. So, these are the exchange rates, this is where you keep track of it, and this is what we use on a day-to-day basis.

The last piece on here is Multicurrency Access, you can only get access to this when you’re alone in the system. You can turn on and turn off different currencies and different exchange tables for each company. So, that’s kind of the setup from that point of view. That’s the global setup. Then underneath the individual firms, we have three more that we need to deal with, which are these three here: Multicurrency, Rate Types, and Currency Accounts.

So, the first thing I’m gonna talk about is currency, inside here. This is where your functional currency is set, once it’s been set, it cannot be changed. So, if you don’t have the correct functional currency, give us a call, we can talk you through what we can do to try and fix that if necessary. There’s a fair amount of work involved in order to change that currency.

So, inside here, the only thing I really wanted to talk about inside here is this little toggle here. This little toggle right here, which says Use Rates Without Adding to a Table, is important in order to run the exchange gains and losses. The reasons you need that is that when you get a bank transaction, the bank transaction that you get on a bank transfer, for instance, from one U.S. account to a Canadian account or Canadian to your U.S. account, the bank sets the rate, you do not. You do not want to use that bank rate for a whole bunch of other transactions, you only want to use it for the one transaction.

So, we have to turn this on. By default, it is turned off. And then we give it a quick password so that nobody does this by accident. They have to know the password. I keep it usually simple, something like FX for foreign exchange. But we do need to turn this on. These three are automatic, and I’m just going to talk about, these are the rate type IDs, so we can do that. Once we’ve done that, we’ve set averages down here and set everything to average to default, then we go Okay.

Second one, Rate Types. When I look at a rate type and I grab an exchange table, I’m gonna take Canadian Average, this is where I assign that rate type to this particular change currency. This is important because it allows you to push things here. You can set the GL codes here for your gains and losses on foreign exchange, but most people do it at the currency level rather than at the exchange rate table level. But you can do it at the exchange rate table if you need more detail on your foreign exchange gain and loss.

The last one that I wanna talk about is the Currency Accounts. And here, when I go to my Canadian, I have all my different GL codes. And these are where I’m realizing my gains, my unrealized gains and my unrealized losses, and then I’ve got some offsets inside here. The offsets, we don’t use too much. The bottom two are important, we must have a rounding write-off and we must have a rounding difference. There are times with transactions when you’re multiplying by four decimal places on an exchange rate, that you will get problems with rounding, you’ll be able to pay, and you need a place to put it. Ordinarily, these are usually set to the same rounding right off, as this puts it into the same kind of area as the same accounts as you’re doing same losses. So, once you’ve set those, that’s where the GL codes are gonna come from when we actually do the transaction.

So, now that we’ve got it all set up and ready to go, we can now talk about the different types of transactions. So, we’re gonna start with the cash account. So, ordinarily, we have a bank account. And in my case, I’m gonna do a reconcile my bank account, I’m gonna pick up RBC, pick the Royal Bank of Canada. Its currency is in Canadian dollars, and we’re showing that we’ve got C$8,754, that’s what on my bank statement. When I click on Transactions, we look through here, I’ve got a couple of outstanding transactions. So, I’ve got an adjusted book balance here of C$16,754.94. Now, this number, if you’ve done your bank rec correctly, this Canadian dollar value should be equal to the Canadian dollar value in your general ledger.

So, people go, “Well, I don’t see that,” because when I go to my Summary and I grab the right account, which is this, I see $11,887.84. And that’s because that’s in U.S. dollar, that’s functional currency. This is foreign currency, the C$16,000. So, we’re gonna go to Currency here, when you click on the Currency button at the bottom, it will then show us the period balance, we want the period balance, and we’ve got the C$16,754.94. These two numbers here are the two that you’re balancing your checkbook to. You need to balance to this number here.

Now, this is showing that I got C$16,000, and in my general ledger, it’s worth $11,807. Well, even in today’s market, we’re not at a 0.70, we’re at a more like a 0.75 or 0.80, I guess it is right now. I think it’s 79 cents, is what it’s currently at today. So, we need to change this. We can’t change this number, the C$16,754.94. We must change only this number. But you can’t enter a journal entry to do this. The reason you can’t enter a journal entry is that every transaction will affect the two currencies at the same time. If I affect only functional currency, it will show up down where that zero is and throw my bank record. So, what we need to do is there’s a function inside GP called revaluation. So, what we do is we have to set up the GL codes to accept revaluation. So, what I’m gonna do is I’m gonna drill back to the Account Maintenance, and we’re gonna look at the accounts themselves.

So, underneath the account, this is my Cash in Bank-Canada. When I click on my Currency tab here, I have a number of settings. I revalue the account, I want to revalue the account by the period balance because I want to revalue all the money, All C$16,000 needs to be revalued, not just the amount that I transacted this month, but all C$16,000. I wanna post the account to this GL code, 1101, I don’t wanna put it to an offset account. And what currency do I wish to revalue? I’ve got them all, but in this particular case, we only need Canadian. Underneath the revalue, we must make sure that this is toggled. The number 1 question I get is, “How come it didn’t revalue when I download evaluation?” Is because this toggle is by default turned off. In order to turn it on, you must come into… I’ve done it for both this and I’m also gonna show accounts payable in a second.

So, now that we know that we’ve got our bank balance and things like that, we’re gonna talk about revaluation. So, now when I go to my Revaluation…I’m gonna close these up inside here. Underneath Routines and Financial, I have something called Revaluation. And when I click on the Revaluation, I can select predefined ones or I can define one myself. I’ll be defining one in a second. But if I grab my cash, there it is there, I’m going to revalue the Canadian dollar. I’m taking period 27…year 2027, which I’m in, and Period 4, which is April. And at this point here, I’m going to grab the exchange rate that’s in effect, I’m gonna take 0.75. So, I’m going to grab that exchange. I can select a specific date, or I can select a specific rate.

So, if I wanted to use a spot rate off the Bank of Canada that I did not use for anything else in my system, I can hit Enter Rate, I can then click over here and go 0.79 because, say, today, that’s what it is. I’m only gonna use two decimals, but you can get a lot of decimals. When I hit tab, that toggle that I hit very early on, which showed the FX, you know, along with the rate tables, gives me this Continue button. When I hit the Continue button, asks me for the password, only for the password, and now it’s going to use 0.79.

If I now hit Revalue at this point, I’m printing the report only, and it’s a realized gain because this is a cash account. So, when I hit Revalue, it’s gonna print it to the screen so I can take a look at what it’s about to do, I get to look at this. And always run the print report first so that you know what it’s going to do. So, there it is there. There’s my C$16,000, there was my original functional amount of $11, 887. And what it wants to do is it wants to move from 0.7095125, which was the average exchange rate, this num, 11,000, divided by this, and it takes this number and multiplies by this and then defines the difference as $1,348.

So, if I was to run this, and I’m gonna post this right now, you’ll notice up here I’ve got my account set, this realized gain that I have here is going to be posted and changed, and it will change only the U.S. value, not the Canadian value. So, I’m gonna close this and I’m gonna post this report instead. I’m gonna go to here, I’m gonna grab Cash, and I’m going to hit Post. When I hit Post, it asks me for a posting date. And I’m gonna do this at the end of the month, so it’s a month-end transaction, which is ordinarily where you need to do it. And I’m now ready to go, it’s at 0.79, I’m all happy, I don’t revalue. And then when I close this, it can print a report at that point, it will by default, I’ve turned mine off for speed.

So, inside here, I now go into my Series Post to make sure that it posted through. There’s my multicurrency revaluation, shows up…I have it posting to the GL. So, I can now go and take a look at this journal entry. And what you’ll see when I look at this journal entry, the only one in my system right now right here, is that underneath Canadian dollars it says 0. But when I go to my View, and I go to Currency, and I go to U.S. dollars, I have $1,348. And this is important, it’s a Canadian transaction, it’s got a U.S. value, has no exchange rate attached to it. You cannot key that entry manually, it’s not possible. So, now I’m going to go into my Series Post, and I’m gonna post it. Pretty simple, go like so, we hit the Post, and we’ll cancel the analytical one. And that’s fine. Okay.

So, now that it’s been posted, I can go back to my Summary here. Oops. You know it’s got two more zeros. There we are there. This has now moved, so now when I click on Currency here, it still says C$16,754.94, but you’ll notice that the exchange rate has now changed to 0.7899999, it’s as close as it can get to the penny, the penny causes the differential, and it’s actually worth $13,236.40. And that is how much U.S. it should be worth based on today’s spot rate of 0.79. This is then what now shows on your financial statements, your $13,000 in your cash account. And from there, you can then run that through the…when you put it on your financial statements, it will be the correct value, when you show the auditors you’ve got a bank rec that shows this and you can say that, “I have the value of that at the spot.”

Now that was a permanent timing difference. It’s permanent because nothing will make that change. In other words, as I take checks out at different rates from AP and I put cash in from AR at different rates, those rates remain with those transactions, but they never match those transactions together. So when I use money, I can end up with some fairly significant differentials on my average exchange rate based on how many transactions we do in a month and what’s the differential in the exchange is. At the limit, you can end up with a large amount of money from that point of view if your foreign exchange is getting watched. You have to be careful, you have to watch this on a monthly basis. So, that is the checkbook.

The next one, which everybody always asks me about is, how do I do my subledgers? So, when I look at a subledger, and I’m gonna use accounts payable, all my accounts payable is all done to an account called 2100. So, when I run a trial balance…so I’m gonna hit the Multicurrency trial balance, I’m gonna hit the Modify just to show you what I’ve done. In order to get the multicurrency information that you need to balance this, you must run this in detail, okay? There are two reports that run when you run this in detail, with the multicurrency not excluded, and this box is unchecked. One is all the detail, which I really don’t care about. But I do care about the second report that comes out which is the summary page. So, inside here, I’ve changed the…we enter the date as 4/30/27. I’m not gonna put a date field because I have nothing in the future for this. And what I can do is when I go to Destination here, I’m putting it to the screen, making sure, I can hit the Print button. And this will generate the print job.

Now, mine is not very large, yours may take a little bit of time because this takes some time to do, and it flows through and it shows you here all the U.S., and then at the bottom, it shows you each of these. Now, when I close this and I’m just gonna close it right now because there’s lots of transactions on it, there’s, like, 19 pages, I’m gonna go Close, I get another report, and this is the report that I care about. This report here shows you I have C$5,000 in Canadian outstanding, I have A$0 outstanding Australian, and I have $1,315,807, okay? So, what I need to do now is I now need to balance my subledger on the Canadian dollar. That’s how much money I owe, I owe C$5,000 Canadian, and that means that I should be revaluing that C$5,000 at 0.79. So, I’m gonna leave this one here open, I’ll just move it over to the side, and let me just move across so we can see those numbers. And I’ll move it over here so we can see. Okay.

So, now that I’ve done that, I go back to my Financial and I look up my Summary Account. Now, when I go to my Summary Account, I go like so, Accounts Payable at the end of Period 4. I go to Currency, same as I did on the check, and now at this point here I can see that I have C$5,000 here. It’s current value, according to the GL, is $3,720, right? Over here, it’s $1,315,807, $1,315,807.65. So, these two balance. It also shows that I have New Zealand dollars, I have none outstanding, but I have a balance in my GL Code of $59 loss. And that’s because I deposited New Zealand dollars and then I used all the New Zealand dollars, emptied the account of the New Zealand dollars, but I did it in a different exchange rate. GP does not write that differential off without you doing something, and the only way to get rid of that is through revaluation.

So, what we’re gonna do is we’re gonna click on the Revaluation. Now, because this is gonna auto-create exchange gains and losses as you enter the next transactions and pay all these transactions off, we want this to be reversing. Because if I change the value in my GL and then the next month, it recognizes the gain and loss on the C$5,000 that I pay out, it’s gonna wipe everything out, but it’s not going to…it’s going to leave the money behind. So, ordinarily, we do this as a reversing entry, which is unrealized. So, I’m gonna leave those two, I’m gonna go like that, and I’m going to click on my Revaluation, and I’m gonna show you how to set one up. And this one is AP, I’m just gonna do AP only. Most of my clients, most of the clients use Financial, you can revalue individual transactions inside your subledger if you wish. Most people don’t, because it means that if you’ve got 10,000 transactions, it has to revalue 10,000 different pieces. Most people just do it at the month end and do the balance at the end of the month to match up with your subledger, then balance.

So, the two I’m gonna do is I’m gonna go into here, I’m gonna grab the Canadian dollar. And in this one, I’m gonna enter the rate, and I’m going to enter 0.79 again. And then we’ll go Continue, and go FX. Okay. I’m going to hit the New Zealand one, and I’m going to hit Enter Rate, and I’m going to put in…now New Zealand is less than Canadian, so let’s go 0.6. I don’t know what it is today, I haven’t looked it up. But let’s assume that it’s 0.6. We go like this, we go Continue, and we hit FX. So, these are the Bank of Canada rates that we currently got or the rates for whatever bank you’re using as your source for the exchange rates. There we are there. Underneath the Restrictions, I don’t wanna run it against every single GL code, but what I do wanna do is I want to run it against Segment number 2, which is my account number. And I want to run it for 2100 through 2100, and I’m gonna go Insert, and that will then just pick up my 2100. I go Okay.

So, now I’m going to print the report because I want to see what it looks like, and I’m going to hit the Revalue. When I hit the Revalue, it’ll print it to the screen. Now, because this is open, I’m going to need to close this. Otherwise the report will print as you guys all know. There we are there. So, you’ll see here that the New Zealand dollar is 0, average exchange rate 0, the functional amount is $59.84. Well, 0.6 times 0 means I got a $59.84 loss or gain so I have to do that. Inside here 0.79, I realized I need to move it by $230 to write this into 0.79 at C$5,000. So, this looks good to me. So, I think this is fine so I can post this. If I wish I can bring this down, click on the AP. I hit the Post. When I hit the Post, it says 04/30/27. But you go, “Oh, but this is an unrealized loss because I want it to reverse the next month because my accounts payable subledger will automatically self-correct itself over time as I pay my transactions off.” So, I’m gonna reverse this on 05/01/27, put it into the next month. And then I just click on the Revalue, hit the Post. And I’ll close this. And then again, underneath my Series Post I will have that one there. I’m not gonna look at it as it looks exactly like it did before. And we’ll hit the Post button here. And we cancel down and now I close this.

So, now what I can do is I can go back to my Summary Requirement. For those that don’t know, when posting the general ledger, you must close and reopen the Summary for it to actually work properly. Oops, one more zero down. Here we are, we take Period 4, we go to Currency, there is there, $0 and $0 which is what we expected. That’s good. That’s a bonus. This one is C$5,000, 0.79, $3,950. The $1,315,807.65 hasn’t changed. And that matches up to my subledger. So, at this point, my subledgers are now balanced. I’m balancing this number against my payables, and I’m balancing this number against my payables.

Now, I would say 60% of the clients run their accounts payable in two separate GL codes, one Canadian, and one for the U.S., in which case, the Canadian version of this will have a zero inside the functional currency, there should never be anything but Canadian dollars in that particular one, it’s a good check, you can make sure that that is really going on. So, that’s, kind of, how the multicurrency revaluation and stuff works. It’s 9:25, I think that’s right on time for what we wanted, I will just quickly go back to my slides here. And the next thing is, do we have any questions? Tess, any questions?

Tess: Thanks, Don. Yes, we’ve had one question come in. But if there’s any others, please submit them in the control panel. So, the first question is, “Do I have to manage the exchange rates myself or is there a third-party tool that automatically updates them?”

Don: There’s a couple of third parties that will actually auto-update the exchange table for you. You can download them from different locations. One location is the Bank of Canada, Rockton software has one, it used to be part of the Olympic product, you used to be able to get it from Olympic, but Olympic got bought by Rockton. So, Rockton has one, can’t remember the other ones, how do you remember the names of them? But there are a couple of them out there that allow you to do that. And you set them up and then they’ll go out to the websites on a daily basis, hourly, daily, weekly, whatever you wish, or monthly, depending on how often needs to be done. And they will then update the exchange rates based on the ones that you asked it do so.

Yes, there is most of my firms don’t tend to update that often, they tend to update on a weekly basis, and they tend to do it manually. Most firms are running one or two currencies. In other words, if you’re a Canadian company, you tend to have a U.S. bank account and Canadian bank account, there might be something in euros, but not very often, mostly of the product is in U.S. or Canadian dollar.

In the U.S., it’s less likely that you have multicurrency turned on, if you do then, you know, depending on whether you’re working with Mexican peso, or whether you’re working with the euro, or the Canadian dollar. Really depends on where you are in the world as to how many different currencies you have. So, that’s really the question there. Okay?

Tess: All right. Thanks, Don. That is the only question that has come in. So, thank you. If you could go to the next slide, I think it’s just highlighting the upcoming webinar on December 7th. And that can be accessed on our events page on our website. So, thank you for your time today, Don, and thank you to everyone who joined us today. And we’ll see you next month.

Don: All right. Thanks, all.

Tess: Thank you.

Don: Thanks.