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Talking Tech: NetSuite Multi-Currency Features and Considerations

Let’s Talk Tech.

Accordion’s “Talking Tech” series explores how different CFO Technology solutions can empower finance functions to support organizational strategic initiatives – by implementing business process recommendations, optimizing operations, and capitalizing on value creation opportunities.

Now, let’s take a look NetSuite in the context of multi-currency management.

NetSuite multi-currency management supports over 190 currencies with real-time currency conversation and consolidation, increasing efficiency for global businesses.

Considerations When Using NetSuite Multi-Currency:

When setting up your business with NetSuite for Multi-subsidiary and multi-currency use, it is important to take into consideration the functional currency of each business.

Each subsidiary will be assigned a functional currency for reporting. Additional operational currencies can be added if you are willing to transact with customers in that currency. Financial reports will utilize the exchange rates to convert to the functional / base currency of the subsidiary.

Consolidated reports will then convert the currencies from the base currency of the child subsidiary to the base currency of the parent subsidiary. This may result in a Currency Translation Adjustment.

NetSuite Multi-Currency Available Features:

Currency Exchange Rate Integration

The currency exchange rate integration feature automatically updates currency exchange rates by the specified provider one time each day for all NetSuite accounts utilizing the currency exchange rate integration. The automatic updates occur at approximately 6 AM in one of the four available time zones. Daily integration ensures accurate reporting and conversation of currencies within your transactions.

Multi-Currency Customers & Vendors

NetSuite Multi-currency allows for the assignment of more than one currency to a customer of vendor enabling you to do business with customers / vendors who use multiple currencies in their business. This feature enables you to enter transactions in multiple currencies for an individual customer or vendor. You also have the option of accepting payment from customers in any of the currencies in which they do business. One consideration to take into account is that a payment must be applied in the currency of the transaction. A transfer may be required to ensure that the payment is applied in the currency of the invoice.

Revaluation of Open Foreign Currency Balance

Differences in the exchange rates between your base currency and the foreign currencies used in transactions can cause a difference in the transactions’ base currency valuations. These changes in base currency valuations impact the general ledger. NetSuite Multi-currency functionality automatically revalues transactions that close during each accounting period and posts the variance to the realized gain/loss account as part of the Month-End Close Checklist. The month-end revaluation step of the close checklist will generate a journal to post the variances for open transactions, foreign-currency accounts, and non-denominated accounts to the unrealized gain/loss account. The Foreign Currency Variance Mapping feature enables you to create foreign currency variance posting rules that map foreign currency variances to other accounts if you prefer.

Auto-calculation of Consolidated Exchange Rates

Consolidated exchange rates ensure that currency amounts translate properly from child subsidiaries to parent subsidiaries for consolidated reporting. With NetSuite Multi-currency functionality,  Consolidated exchange rates are generated between the base currency of each subsidiary and its parent or grandparent subsidiary for every accounting period and accounting period grouping such as quarter and fiscal year. NetSuite will check the transactions and currency exchange rates from which consolidated rates are derived and automatically update the consolidated exchange rates.

The NetSuite OneWorld product allows for automation and efficiency when running your global business.

About the Author

Ana Lambe
Ana Lambe
Senior Director

Ana is a Senior Director in NetSuite Services with 8 years of digital transformation and system implementation experience for companies ranging from Fortune 100 to small LLC’s. She has industry expertise working with companies in software & technology, professional & financial services, and media & publishing.  Read more

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