The report on Exchange rate differences in SAP Business One is a summary of all selected accounts and business partner records, which also contains the corresponding exchange rate difference transaction to clear the individual accounts and BP records.
The report on Exchange rate differences in SAP Business One is an indispensable tool for companies that trade in foreign currencies. It analyses the impact of exchange rate fluctuations and provides functions for posting adjustments to ensure accurate financial reporting.
Functionality
The function Exchange rate differences regularly calculates the difference between the local and foreign currency balance based on the current exchange rate on the calculation date. SAP Business One generates proposals for automatic journal entries to settle these differences and adjust the balances.
Procedure for preparing the report
- Navigate to finance > Exchange rate differences.
- In the window Exchange rate differences - selection criteria you define parameters such as key date and affected accounts.
- After running the report, the system displays recommended exchange rate difference transactions, which you can check individually and either accept or reject.
Booking of exchange rate differences
To post the proposed exchange rate difference transactions, select the relevant postings and confirm them in the report.
Background
Exchange rate differences arise when the exchange rate changes between the time the document is created and the time of payment. These differences can lead to profits or losses that must be correctly recognised in the accounts.
Example:
A company buys goods in US dollars.
- Invoicing: Exchange rate 1 USD = 0.90 EUR, booking is made at this rate.
- Time of payment: Exchange rate 1 USD = 0.85 EUR, resulting in an exchange rate difference of 0.05 EUR per USD. This is recognised as a loss.
