Whether directly or indirectly, every business is a global business. Somewhere in the supply chain—from your suppliers’ suppliers to the customers of your customers—you’re part of the global business environment. Though this means increased risk, it also means increased opportunity. New customers, better prices, and lower shipping costs, the global marketplace has opened you up to a variety of ways to grow your business.
Following our business intelligence deep dive, we would today like to look at how currency management in Acumatica works, discuss how it can help you save time when working internationally, and consolidate your international business more easily.
What Is Currency Management in ERP?
Designed to help you mitigate financial risk when working across borders, currency management is often a necessary component of an ERP platform. Whether used to help you take advantage of fluctuations in currency or make life easier for customers, suppliers, and subsidiaries, currency management functionality gives businesses the freedom to work internationally.
How Does Currency Management Work in an ERP Platform?
Currency Management automatically computes realized and unrealized gains and losses, performs account revaluations, and translates financial statements.
What Should I Look For?
When looking at ERP, your currency management module should offer the following:
- Easy Revaluation of General Ledger Accounts: Currency management makes it easy to adjust your GL based on currency fluctuations. Adjust the value of the base currency and post the appropriate currency gain or loss transaction.
- As Many Currencies as You Need: Currency management should be ready to work in any currency or rate type and update exchange rates any time. Additionally, vendor and customer setup should be easy. Additionally, if you only work in select currencies, administrators should have the ability to limit the number you choose to display for users.
- Flexible Number of Decimals: Two decimals work for some, but other times, you need to go deeper. You should have control over the number of decimal places.
- Automatically Handle Rounding Differences: Paired with configurable decimal position, currency management should automatically compute rounding differences sensitive to the decimal precision you want.
- The Ability to Track Gains and Losses: Paired with a powerful BI solution, currency management should deliver easy tracking of gains and losses from currency transactions.
- Connected Across Your Business: From e-commerce to accounts payable and receivable, currency management needs to connect to your entire software stack.
Do I Need Currency Management?
Many businesses looking at ERP ask whether they need currency management. The answer? Maybe. Usually, currency management ranges from “we might need it in a couple years” to “this is a top priority” on a company’s list of priorities (learn more in the free whitepaper, Five Steps to Navigating ERP Selection and Implementation).
Say you only work in the USMCA trade zone and only do a small portion of your business outside of the US. If you’re only managing a couple transactions each week or day, you could probably manage without it. While yes, you may have to deal with VAT headaches in Canada, you might lose a tiny percent of a percent due to a currency fluctuation in a USD/MXN translation, the concept of currency management might be nice, but not necessary.
However, if you’re reading blogs about currency management in an ERP solution, you probably don’t deal with a couple transactions in a trade block. You probably are working with hundreds of items in your AP and AR logs that need to be tracked, translated, and managed.
Either way you look at it, currency management should be an option. Whether you’re adding it today or sometime in the future, it should be offered by your ERP vendor and easily added when necessary.
Acumatica Cloud ERP: Built for the Midsized Business
Maybe you haven’t gone international, maybe you have. Either way, your ERP solution should offer this as a built-in solution able to be added when you need it. Acumatica Currency Management helps you increase your volume of international business while staying in control of your finances. Advanced features let you support all your international subsidiaries, vendors, and customers.
As one of the leading providers of Acumatica Cloud ERP for growing businesses, Crestwood can help you make the most of your ERP. From consultation to implementation to ongoing support and improvement, we have the skills to help your midmarket company do more with Acumatica. Get to know more about Acumatica Currency Management here and contact us to discuss your ERP options.