Exchange of Currencies Using Spot and Average Rates



Foreign exchange functionality in ProudNumbers allows the translation of data for companies operating in a currency other than the base consolidated currency. The first step for consolidation where mutliple currencies are involved is to set up exchange rates. Currencies are configured from the Client Folder/Foreign Exchange Rates by:

  • Clicking on the "+" symbol
  • Entering the rate and date for both Average Exchange Rates and Spot Exchange Rates
  • Clicking the Save (floppy disk) button

The base currency is derived from the Chart of Accounts on which the Consolidated Client is based. Conversion currencies are obtained from Sage Company/Client import. Average rates are used for Profit and Loss calculations, and spot rates are used for the Balance Sheet, Debtors, and Creditors.

For KPIs, both rates are employed depending on the type of KPIs-whether they are based on Profit and Loss calculations or the Balance Sheet.


Basic Principles for Setting Up Average  Exchange Rates

  • At least one average currency exchange rate must be set.
  • If an exact exchange rate exists for the last day of a specific interval, ProudNumbers utilises that rate for transactions during that timeframe.
  • If an exact rate is unavailable for the specified period, ProudNumbers uses the nearest future rate.
  • If neither an exact nor a future rate is available for the specified period, ProudNumbers uses the nearest past rate.
  • For subsequent periods, ensure that the periods used for calculations are consecutive. Specifically, the 'From' period should be immediately followed by the 'To' period.

Example:

  • Base Exchange Rate Table
  • This table shows the exchange rates set for different periods.

Rate From To
1.12 01/01/2023 10/01/2023
1.18 11/01/2023 28/02/2023
1.20 01/03/2023 05/03/2023

Reporting Period Period End Date Applied Rate Reasoning
January 2023 31/01/2023 1.18 There is a rate for the end of the monthly reporting interval (31/01/2023) in the exchange rates table (11/01/2023 - 28/02/2023).
February 2023 28/02/2023 1.18 The exact rate exists for 28/02/2023
April 2023 30/04/2023 1.20 Nearest past rate; no exact or future rate available

Basic Principles for Setting Up Spot Currency Exchange Rates

  • At least one spot exchange rate must be set.
  • If an exact spot rate exists for the day, ProudNumbers utilises that rate for the transaction.
  • If an exact rate is unavailable for the day, ProudNumbers uses the nearest future rate.
  • If neither an exact nor a future rate is available, ProudNumbers uses the nearest past rate.