Exchange Rate Management

Overview

The Exchange Rate feature allows users to:

• Activate currencies for use in transactions
• Set and maintain currency conversion rates
• Automatically generate reciprocal rates
• Manage effective dates for rate changes
• Track active/inactive rates

Prerequisite: Activating Currencies

Before managing exchange rates, you must enable the currencies in Accounting Settings:

1. Navigate to: Accounting Settings → Currency
2. Under Available Currencies, select the currencies your company will use
3. Configure the required accounts:
   • Foreign Exchange Gain Account
   • Foreign Exchange Loss Account
   • Unrealized Gain/Loss Accounts
4. Save settings

Important Notes:

• Only activated currencies will appear in exchange rate management
• Currencies already used in transactions cannot be disabled
• You must configure the four FX accounts before processing multi-currency transactions

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Exchange Rate List

The main view displays all configured exchange rates with the following columns:

Column	Description
From	The source currency being converted from
To	The target currency being converted to
Rate	The current conversion rate
Effective Date	When the rate became/becomes active
Status	Whether the rate is currently active

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Adding a New Exchange Rate

Step-by-Step Process

1. Click "Add New Rate" button
2. Fill in the exchange rate details:
   • From Currency: Select from your activated currencies
   • To Currency: Choose another activated currency
   • Currency Rate: Enter the conversion rate
3. Set the Effective Month
4. Toggle Enabled to activate the rate immediately
5. Click Save

Automatic Reciprocal Rate Creation

When you save a new exchange rate, the system automatically:

1. Calculates the reciprocal rate (1 / original rate)
2. Creates the reverse currency pair
3. Applies the same effective date
4. Matches the status (Active/Inactive) of the original rate

Example:

• If you create SGD → IDR at 12,800
• System automatically creates IDR → SGD at 0.0000781 (1/12,800)

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Foreign Exchange Accounting

The system uses these accounts from your Accounting Settings to handle currency fluctuations:

Account Type	Purpose	Example Account
FX Gain	Records realized gains from currency conversions	454000 - Gain on Foreign Exchange
FX Loss	Records realized losses from currency conversions	950000 - Loss on Foreign Exchange
Unrealized Gain	Tracks paper gains on outstanding transactions	456000 - Gain on FX (Unrealized)
Unrealized Loss	Tracks paper losses on outstanding transactions	960000 - Loss on FX (Unrealized)

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Best Practices

1. Setup First: Activate all needed currencies before creating transactions
2. Monthly Updates: Refresh rates at least monthly for accurate reporting
3. Verify Rates: Double-check automatic reciprocal calculations
4. Monitor Accounts: Regularly review FX gain/loss accounts
5. Document Changes: Note significant rate adjustments for audit purposes