Microsoft Dynamics 365 Business Central is a powerful enterprise resource planning (ERP) system that offers robust multi-currency processing capabilities. With this functionality, you can easily process transactions for customers, vendors, and bank accounts using currencies other than your local currency. In this article, we’ll explore the ins and outs of multi-currency processing in Dynamics 365 Business Central, including how to add additional currencies, manage exchange rates, assign currencies to customers and vendors, and track foreign and local amounts. So let’s dive in and discover how to unlock the full potential of multi-currency processing in Business Central!
Setting up multi-currency
Go to the Currency page and create the required additional currencies.
Use the Currency Exchange Rates page from the Process menu to record exchange rates. This table needs to be frequently updated, possibly daily, to reflect current exchange rates for transactions.
Assign currencies to applicable customers, vendors, and bank accounts. The currency code will default to the documents/journals when it’s used.
Document Processing
On the document or journal, review the currency code that defaults and then follow the normal steps in the processing the document.
The transaction will keep track of the foreign amount as well as the converted local currency amount. This can be reviewed on the Vendor Ledger Entries page.
Currency-Specific Rounding Rules
You can define rounding rules separately for each currency, giving you greater control over how amounts are calculated and displayed.
Exchange Rate Management
Maintain exchange rates for each foreign currency, including historical rates, and update them seamlessly from external service providers. This ensures your financial data stays current and accurate.
Payment Tolerance Setup
On the same configuration page, you can set up payment tolerances to automatically close invoices when payments fall slightly short or exceed the invoice amount. This is especially useful for small discrepancies where manual correction would be inefficient.
- If the underpayment meets the tolerance, the invoice is closed with a detailed ledger entry.
- If there’s an overpayment, a new ledger entry is posted to clear the remaining amount.
Tolerances can be set by percentage or fixed amount, and applied globally or per currency.
Preview Posting for Accuracy
Avoid surprises in your financial records by using the ‘Preview Posting’ feature. This tool lets you verify entries before they’re posted—available both at the transaction level and when running the ‘Exchange Rates Adjustment’ report.
- Transaction-Level Preview: View the original amount and the amount in local currency (LCY).
- Exchange Rates Adjustment Preview: See how adjustments will affect your ledger before committing.
- Adjust Per Entry Toggle: A handy new feature for Exchange Rate Adjustment is the ‘Adjust per Entry’ toggle. When enabled, adjustments are applied individually to each entry rather than as a lump sum—offering more detailed view over your financial adjustments.
