An account in SAP Business One that is not in the local currency but in the currency of another country.
With SAP Business One you can both ledger accounts as well as business partners in foreign currencies. These are accounts that are held in a currency other than the local currency - the company's legally prescribed accounting currency.
Three options are available for currency definition:
- Local currency
- Specific foreign currency
- All currencies
If an account is set to "All currencies", documents and journal entries can be created in any currency defined in SAP Business One. However, reports, reconciliations and balances remain limited to the local currency. For accounts in a specific foreign currency, all postings are made in that currency, while the account balance is displayed in the local currency, the system currency and the foreign currency. The system currency, which is defined in the settings under Administration > System initialisation > Company details > Basic initialisation may differ from the local currency and is often used for reporting to foreign parent companies.
In order to utilise foreign currencies efficiently Exchange rates must be maintained regularly. This can be done manually in the exchange rate table. It is important that foreign currency vouchers are also balanced in the same currency in order to avoid double balances in different currencies.
Foreign currency accounts offer the following advantages:
- International business transactions in different currencies are possible.
- Financial reporting is simplified.
- Exchange rate risks can be better controlled.
Versino Financial Suite
the Versino Financial Suite improves the handling of foreign currency accounts in SAP Business One. It automates the import of current exchange rates from the European Central Bank (ECB) so that they are always up-to-date and available in the system without any manual effort.
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