NetSuite Multi-Currency Feature & Exchange Rate Integration
Many organizations must handle different currencies as part of their business. Dealing with multiple currencies always brings challenges, however, such as who will update the currencies, or how to revalue foreign currency.
One thing is certain—manually handling currency conversion and financial report translation can be time-consuming and error-prone. Luckily, NetSuite offers ways to automate multicurrency processes. With proper setup, NetSuite can manage multiple currencies at the transaction and reporting levels.
NetSuite supports multiple currency natively. With the multiple currency feature enabled, you can create transactions for foreign customers and vendors within NetSuite. This feature also provides the function to manage exchange rate fluctuations at both the account and financial report levels.
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. Currently NetSuite supports integration with 2 rate providers; Xignite and HSBC (starting from 2021.2).
But for local usage in Turkey, companies have to use the rates that are provided by Central Bank of Turkey published every business day. Moneta’s NetSuite Turkey localization provides this integration and using this bundle you can update currencies used by Turkish subsidiaries automatically. Moneta NetSuite Turkey localization imports all 4 types of currencies from Central Bank’s portal and users can choose to use any of them on transactions.
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.
Turkish subsidiaries should use the buying exchange rate of Central Bank of Turkey at the end of the month for Currency Revaluations. Moneta Turkey Localization updates the buying rate provided by Central Bank of Turkey to NetSuite’s exchange rates. With this month end currency revaluations can be completed without any issue.
To learn more about how your business can benefit from using NetSuite Multi-currency functionality, PLEASE FEEL FREE TO CONTACT US!