Improving dual currency processes in Dynamics 365
AlfaPeople |
Nov 25, 2019

Improving dual currency processes in Dynamics 365

Today, globalization and the breadth of international treaties in place have boosted trade and forced companies to adopt new control and management measures. Dynamics 365 Finance’s Dual Currency functionality allows firms to register their transactions in a secondary currency and convert them to their respective value in their local operating currency.

The Dual Currency functionality was introduced to Dynamics 365 in version 8.1 (October 2018). It allows the reporting currency to function as a second accounting currency. Therefore, all companies using a version earlier than 8.1 will have to follow a few steps to perform a mandatory upgrade, according to Microsoft?s instructions. Next, we will show you the scope and activities that need to be done to complete this upgrade.

It is important to note that the following currencies are used in Dynamics (and they are assigned in the same order):

  • Transaction currency amount (UF, for example)
  • Accounting currency amount (CLP for companies in Chile)
  • Notification currency amount (USD when reporting is also done in this currency)

The following processes are affected by Dual Currency:

  • General Accounting
  • Financial Reports
  • Accounts Payable
  • Accounts Receivable
  • Cash and Banking Management
  • Fixed Assets
  • Consolidations

Improvements made by Dual Currency:

  • Reports and Queries: Several reports have been modified, showing both the Accounting currency and the Notification currency. The reports showing the Transaction currency were not changed.
  • Accounting Journals: General and invoice journals were updated to include the possibility of managing the Notification Currency, allowing you to establish a Fixed Exchange Rate for the currency in question. If the Transaction currency is the same as the Notification currency, the fixed exchange rate is not taken into consideration.
  • Supplier Invoices, Sales Orders and Sales Agreements: These have all been updated to include the Fixed Exchange Rate in their transactions. When the Accounting and Notification currencies are different, a fixed exchange rate can be defined for both the Accounting currency and the Notification currency during the registration of the transaction.
  • Notification Currency Adjustment Journals: This journal allows adjustments to be registered in the accounting ledgers only in the Notification currency. This journal only allows entries at an accounting ledger level. It is not compatible with associated companies, and the currency must be the Notification currency of the legal entity where the journal is published. This type of transaction does not affect the Transaction or Accounting currencies.
  • Financial Reports: A new column definition was created for financial reporting. Notification currency inputs accounted for in the General Ledger can be reported directly, without having to convert them from the Accounting currency.
  • Accounts Payable and Receivable: Client/supplier accounts and aging reports can be obtained in the Notification currency. The adjustment for exchange rate variation will be done towards the accounting currency as a Notification currency, and both processes come from the Transaction currency.
  • Cash and Banking Management: You will need to run the Assistant to update all of the transactions prior to the implementation of the Notification currency.
  • Fixed Assets: Improvements were made to the depreciation process; now, the Notification currency can also be obtained. On the other hand, you will need to run the Assistant to update the notification currency for old transactions.
  • Consolidations: Version 10.0.5 (October, 2019) will include the possibility of consolidating from the accounting currency or from each company?s notification currency.

This tool focuses on the registration of operations in different currencies, which strengthens reporting by providing different reports in highly dynamic, comprehensive formats that allow you to analyze your company’s current situation in an optimal manner, with high management standards, thus adding value to correct decision making.