Things move fast in the global economy, and companies doing business in multiple countries can’t allow administrative processes like currency conversions to create a drag on their back-office operations. Fortunately, JD Edwards EnterpriseOne offers its users excellent tools for managing currency conversions to gain and maintain real-time access to key financial data.
Activating JD Edwards EnterpirseOne’s Multi-Currency Functionality: Getting Started
Our latest Collaborate 19 sneak preview provides you with a teaser for our session “Multi-Company and Multi-Currency. Opportunities and Challenges within JD Edwards.” Part I of this entry deals with getting started on Multi-Currency functionality and setting up Monetary Account Valuation. Part II will deal with Balance Restatement and when to use Detailed Restatement.
The first step in this process is to activate JD Edwards EnterpriseOne’s Multi-Currency functionality. And, while JD Edwards offers out of the box Multi-Currency functionality, effectively implementing it presents a few challenges which users must be mindful of.
Before starting, users will need to modify the General Ledger constants to enable Multi-Currency conversion. Likewise, the appropriate currency codes need to be designated. Users will also need to define business requirements regarding exchange rate update frequency (i.e. daily, weekly, monthly or perhaps real time).
Finally, users may also wish to consider establishing default currency codes for the Customer Master or Supplier Master if the client always interacts with these partners in a common currency.
Points to Remember When First Setting Up JD Edwards Multi-Currency Functionality
JD Edwards customers who are enabling multi-currency transaction processing need to keep in mind that for a given transaction in the General Ledger, Accounts Payable and Accounts Receivable, only one currency can be used.
JD Edwards uses the first line of the transaction to determine whether the transaction is multi-currency or not for all operations that impact inventory (i.e. sales, purchasing, manufacturing).
In addition, if the currency in the first line matches the Header Information, then currency conversion will not take place, resulting in the wrong value being entered into the AA ledger.
For example, if a client owns a Branch Plant that contains inventory that can be sold or issued by two companies with different base currencies, if the first item issue is in the same currency as the Branch Plant, the transaction will not be flagged as multi-currency. Therefore, if the second item in that transaction is issued to a company with a different base currency, the transaction will not be converted to that base currency properly.
Finally, when setting up intercompany transactions, it is important to understand if inter-company transactions between bank accounts in two companies in different base currencies will take place.
Setting up Monetary Account Valuation in JD Edwards
Once JD Edwards has been set up to process transactions in a foreign currency, users will need to revalue open balances for monetary accounts (which usually consist of bank accounts along with JD Edwards AP and AR ledgers) based on current exchange rates, and book unrealized FX gains/losses.
Setting up Monetary Account Valuation is fairly straightforward, but there are a few challenges to keep in mind:
Data Conversion – Users must either automatically split data conversion by currency or do it manually, after the fact.
Automatic Intercompany Account (AAI ICC) – Users need to remember that they cannot define an AAI ICC as a monetary account, meaning that these transactions cannot be revalued at month-end, complicating reconciliation efforts.
Using Existing General Ledger Accounts as Monetary Accounts – Make sure to perform data cleanup operations on journal entries in advance of designating an existing G/L account.
Interested in More? You’re in Luck
Today’s business leaders need no reminder that the economy grows more global with each passing day. Efficiently managing foreign currencies and exchange rate fluctuations is essential to back-office effectiveness, and JD Edwards Multi-Currency functionality provides a valuable tool for accomplishing that aim.
However, effectively deploying and managing JD Edwards Multi-Currency functionality comes with challenges. You can learn more about how to meet those challenges at Collaborate 19 during the session “Multi-company and Multi-currency. Opportunities and challenges within JD Edwards” which will be held on Wednesday April 10th at 2:00 pm in GH 2ND FL Lonestar Salon E.
If, you’re unable to make the session but you’ll be at Collaborate 19, feel free to stop by booth #643 to meet with us in person.
Or you can pre-schedule a one-on-one meeting here.
If you’ve found this page after Collaborate 19 and need support with JD Edwards Multi-Currency functionality, feel free to reach out directly to Syntax by either filling out our Contact Us form or calling us directly at 1-877-968-2948. We’ll be happy to set up a one-on-one meeting with a member of our JD Edwards consulting team.