Configuration of Rate Types and Rates: To Configure Rates

In this implementation activity, you will learn how to manually create rate types and exchange rates of the SPOT type that will be effective on different dates.

Story

Suppose that the initial configuration of the multicurrency functionality has been completed, the implementation consultant has to configure exchange rates for the currencies that you set up in the system in Multicurrency Functionality: Implementation Activity—the Canadian dollar (CAD) and the euro (EUR). The consultant has decided to manually create these rates.

Acting as the implementation consultant, you will manually create the exchange rates for the CAD and EUR currencies.

Configuration Overview

For the purposes of this activity, the following features have been enabled on the Enable/Disable Features (CS100000) form:

  • Standard Financials, which provides the standard financial functionality
  • Multibranch Support, which supports multiple branches in your instance of MYOB Advanced
  • Multicompany Support, which supports multiple companies within one tenant
  • Multicurrency Accounting, which enables multicurrency operations in the system

On the Currencies (AP101000) form, the settings of the base currency (USD) and the foreign currencies (CAD and EUR) have been defined as described in Multicurrency Functionality: Implementation Activity.

Process Overview

Before beginning the creation of rates, you will review the SPOT rate on the Currency Rate Types (СM201000) form and the default rate types on the Currency Management Preferences (CM101000) form. You will then create rate types effective starting on different dates for the CAD currency on the Currency Rates (CM301000) form. You will then run a report on the Currency Rate History by Date (CM651000) form to review the historical rates of CAD for a particular range of dates. On the Currency Rates form, you will create rate types effective starting on different dates for the EUR currency and will then review the EUR historical rates by running the Currency Rate History by Date report.

System Preparation

Before you start performing the steps of this activity, you need to sign in to a company with the U100 dataset preloaded. You must perform the previous activity of this guide before you perform this activity, and sign in to the company where the prerequisite activity has been performed.

Sign in as the implementation consultant by using the following credentials:
  • Username: gibbs
  • Password: 123

Step 1: Reviewing the SPOT Rate Type and Default Rate Types

To review the SPOT rate type (which is automatically created by the system) and the default rate types, do the following:

  1. Open the Currency Rate Types (CM201000) form.
  2. Review the SPOT rate type.

    This rate type, which is the only one currently defined in the system, was automatically created when the system created the base currency.

  3. Open the Currency Management Preferences (CM101000) form.
  4. Review the settings in the Default Rate Types section.

    Notice that the SPOT rate type is automatically specified as the default rate type for the following areas of the system:

    • General ledger (GL Rate Type): This is the currency rate type that is used in GL transactions by default.
    • Cash management (CA Rate Type): This is the currency rate type that is used in cash entries and funds transfers if no rate type is associated with the selected cash account.
    • Accounts receivable (AR Rate Type): This is the currency rate type that is used in AR documents if no rate type is associated with the selected customer.
    • Accounts payable (AP Rate Type): This is the currency rate type that is used in AP documents if no rate type is associated with the selected vendor.
    • Project management (PM Rate Type): This is the currency rate type that is used in project documents if no rate type is associated with the selected customer.

Step 2: Creating Currency Rates for CAD

To create currency rates for CAD, do the following:

  1. Open the Currency Rates (CM301000) form.
  2. In the To Currency box, select USD. This is the currency to which the conversion with the specified exchange rate should be performed.
  3. In the Effective Date box, enter 1/1/2023. (In the process activities of this guide, you will work starting from the 01-2023 period.)
  4. On the Currency Rate Entry tab, click Add Row on the table toolbar, and specify the following settings for the added row:
    • From Currency: CAD
    • Currency Rate Type: SPOT
    • Currency Effective Date: 1/1/2023
    • Currency Rate: 1.2673
    • Mult./Div.: Divide

    The From Currency box specifies which currency the conversion should be performed from by using the Currency Rate and the operation selected in the Mult./Div. box. That is, the conversion rule from CAD to USD is the following: 1 CAD = 1 / 1.2673 USD. Also, for each created currency rate, the system calculates the Rate Reciprocal, which is the inverted Currency Rate. (This column is provided for informational purposes only; the rate will not be used by the system.)

  5. On the form toolbar, click Save to save your changes.

    The created rate is effective starting on January 1, 2023, and does not have an expiration date. The system will use this rate for currency conversion in any document with a date of January 1, 2023, or later.

    Note: In the current system settings, the rates of the SPOT type have Days Effective set to 0 on the Currency Rate Types (CM201000) form. This means that the rates of this type are used in all the documents with a date on or after the currency effective date. If you specify a nonzero number, the rates of this type will be effective for the specified number of days.
  6. In the Effective Date box, specify 1/15/2023.
  7. On the Currency Rate Entry tab, add a row with the following settings:
    • From Currency: CAD
    • Currency Rate Type: SPOT
    • Currency Effective Date: 1/15/2023
    • Currency Rate: 1.2752
    • Mult./Div.: Divide
  8. On the form toolbar, click Save to save your changes.

    This exchange rate will be used in any transaction with a transaction date of January 15, 2023, or later. The previously created rate becomes a historical rate and will be used as the effective rate in any transaction with a date from January 1, 2023 through January 14, 2023.

  9. In the Effective Date box, specify 1/30/2023.
  10. On the Currency Rate Entry tab, add a row with the following settings:
    • From Currency: CAD
    • Currency Rate Type: SPOT
    • Currency Effective Date: 1/30/2023
    • Currency Rate: 1.2776
    • Mult./Div.: Divide
  11. On the form toolbar, click Save to save your changes.

    The specified rate is now effective starting on January 30, 2023. The previously specified rate will be used in any transaction with a date from January 15, 2023 through January 29, 2023.

  12. In the Effective Date box, specify 2/10/2023.
  13. On the Currency Rate Entry tab, add a row with the following settings:
    • From Currency: CAD
    • Currency Rate Type: SPOT
    • Currency Effective Date: 2/10/2023
    • Currency Rate: 1.2697
    • Mult./Div.: Divide
  14. On the form toolbar, click Save to save the row you have entered.

    The specified rate is now effective starting on February 10, 2023. The previously specified rate will be used in any transaction with a date from January 30, 2023 through February 9, 2023.

  15. Review the Effective Currency Rates tab.

    The table displays the currency rate specified for the foreign currency that is effective on the date specified in the Effective Date box.

Step 3: Reviewing the Historical Rates of CAD

To review the list of all CAD rates that are or have been effective in a particular date range, do the following:

  1. Open the Currency Rate History by Date (CM651000) form.
  2. On the Report Parameters tab, specify the following parameters:
    • From Date: 1/1/2023
    • To Date: 2/28/2023
    • Currency: CAD
  3. On the form toolbar, click Run Report.
  4. Review the generated report, which displays the exchange rates defined for conversion from CAD to USD and from USD to CAD that are effective in the specified date range.

Step 4: Creating Currency Rates for EUR

To create currency rates for EUR, do the following:

  1. Open the Currency Rates (CM301000) form.
  2. In the To Currency box, select USD.
  3. In the Effective Date box, enter 1/1/2023.
  4. On the Currency Rate Entry tab, click Add Row on the table toolbar, and specify the following settings for the added row:
    • From Currency: EUR
    • Currency Rate Type: SPOT
    • Currency Effective Date: 1/1/2023
    • Currency Rate: 0.8792
    • Mult./Div.: Divide

    The From Currency box specifies which currency the conversion should be performed from by using the Currency Rate and the operation selected in the Mult./Div. box. That is, the conversion rule from EUR to USD is the following: 1 EUR = 1 / 0.8792 USD.

  5. On the form toolbar, click Save to save your changes.
  6. In the Effective Date box, specify 1/15/2023.
  7. On the Currency Rate Entry tab, add a row with the following settings:
    • From Currency: EUR
    • Currency Rate Type: SPOT
    • Currency Effective Date: 1/15/2023
    • Currency Rate: 0.8760
    • Mult./Div.: Divide
  8. On the form toolbar, click Save to save your changes.
  9. In the Effective Date box, specify 1/30/2023.
  10. On the Currency Rate Entry tab, add a row with the following settings:
    • From Currency: EUR
    • Currency Rate Type: SPOT
    • Currency Effective Date: 1/30/2023
    • Currency Rate: 0.8967
    • Mult./Div.: Divide
  11. On the form toolbar, click Save to save your changes.
  12. In the Effective Date box, specify 2/10/2023.
  13. On the Currency Rate Entry tab, add a row with the following settings:
    • From Currency: EUR
    • Currency Rate Type: SPOT
    • Currency Effective Date: 2/10/2023
    • Currency Rate: 0.8763
    • Mult./Div.: Divide
  14. On the form toolbar, click Save to save your changes.

Step 5: Reviewing the Historical Rates of EUR

To review the list of all EUR rates that are or have been effective in a particular date range, do the following:

  1. Open the Currency Rate History by Date (CM651000) form.
  2. On the Report Parameters tab, specify the following parameters:
    • From Date: 1/1/2023
    • To Date: 2/28/2023
    • Currency: EUR
  3. On the form toolbar, click Run Report.
  4. Review the generated report, which displays the exchange rates defined for conversion from EUR to USD and from USD to EUR that are effective in the specified date range.