In a global business world, the ability to work with multiple currencies is critical. SAP Business One enables organisations to meet this challenge efficiently by supporting multi-currency set-up. This enables the flexible management of financial transactions and the creation of reports in different currency areas.
Three types of currencies in SAP Business One
Within SAP Business One, you can define G/L accounts and business partners in three different currency formats:
local currency
You define this currency as your company currency, which you enter during the initialisation of your business in the settings area under ?Administration ? System initialisation ? Company details ? select. Once defined by an initial booking, this primary currency can no longer be changedSpecific foreign currency
You manage this additional currency alongside your local currency. It allows you to display account balances not only in the primary currency, but also in this reporting currency. This gives you an alternative perspective for analysing and reporting purposes.All currencies
This option offers maximum flexibility. Accounts set up as "All Currencies" allow you to post documents and journal transactions in any currency defined in SAP Business One.
It is important to note that although transactions can be carried out in different currencies, the following applies to reports: SAP B1 carries out reconciliations and balances of G/L accounts and business partners in the local currency by default. This ensures consistency and comparability in financial reporting.
Handling of local currency and system currency
In an internationally operating group, such as a company based in Germany or Austria that is part of a Swiss parent company, the question arises as to the optimal handling of currencies. In such cases, the decision is often made to use the euro (EUR) as the local operating currency, while the Swiss franc (CHF) serves as the group-wide reporting currency. This selection is made when the company is created. Once the first entry has been made in the system, it is no longer possible to change the reporting currency.
When generating actual reports (income statement, balance sheet, list of balances), you can choose whether the
report is to be issued in local currency or in system currency or in both currencies.
Always up-to-date courses in SAP Business One
Especially when the system currency differs from the local currency of a company, accurate and regular maintenance of exchange rates is essential. This is necessary because in SAP Business One all Account balances must be maintained in both the local currency and the system currency. A divergence between the local and system currency requires the exchange rates to be updated daily.
Fortunately, SAP Business One also offers tools and integrations that can simplify and automate this process. One tool for this is the SAP Business Integration Framework, which enables a direct connection to corresponding data services. This connection allows foreign currency exchange rates to be seamlessly entered into SAP Business One. With the Versino Financial Suite you will also have an extended possibility to call up the current courses.
| Currency of the account | bookings | Display balance |
|---|---|---|
| local currency | local currency | ? Local currency ? System currency |
| Foreign currency | ? Local currency ? Foreign currency | ? Local currency ? Foreign currency |
| All currencies | ? Local currency ? every Foreign currency | ? Local currency ? System currency |
Currency parameters in SAP Business One
In the "Administration" module under "Definition" and "finance", you will find the "Currencies" window in which these settings are made. Various important parameters are defined in the definition table for currencies:
code
international ISO codes. This ensures the correct functionality of automatic processing in SAP Business One, especially for the creation of bank files.ISO currency code
The predefined ISO currency code from a list can be assigned here.Currency
In this column you define the currency name, whereby you can also use the ISO currency code here.International code and description
These settings are relevant for cheque printing, where currency symbols or the currency in words are required.Underpayment and overpayment of open items
In these fields, you define the amount or percentage up to which underpayments or overpayments should be automatically cleared. This is particularly important for the automatic posting of customer payments.Automatic derecognition of amount differences
You must define the corresponding G/L accounts for automatic derecognition, which is done in the "Administration" module under "G/L account determination".Decimal places
The decimal places are defined for each currency, whereby a maximum of six decimal places are possible. Once bookings have been entered in the database, the number of decimal places can only be increased, not reduced.Rounding
Here you can specify whether and how individual currencies should be rounded. In addition, the "Rounding in payment" indicator can be used to specify that payment vouchers are also rounded accordingly.
This comprehensive currency management in SAP Business One ensures that all financial transactions in different currencies can be processed correctly. This is crucial for companies that operate in an international environment and need to ensure accurate financial reporting.
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