So many decisions go into the process of selecting ERP software for your business. A high-risk, high reward proposition, companies that make the right decision position themselves for comfortable growth, ease of life, and smarter decisions. However, a poorly planned or executed implementation project is also very likely to fail—in fact, up to 75% of all implementations do.
The bigger and more diverse your business gets, the more complicated this becomes, and for those with international subsidiaries, vendors, or customers, today’s topic is especially important.
As we’ve said in previous blogs on this topic, we aren’t trying to scare you away from making an upgrade—we wouldn’t be in business if that was our intent. Our goal is to help you understand your path to purchase, learn the features and how they can help you, and give you tips for a successful transition from your current system to a solution that positions your business for the future.
After our last article on laying the groundwork for an ERP implementation and deep dives into cash management, accounts receivable, accounts payable, and business intelligence, we would today like to discuss another core component of financial management.
Financial Management: A Continued Deep Dive
As we continue our series on the financial management features and functionality you should consider in your ERP solution, we would today like to explore two necessary components of this software designed to handle two of the complex processes that businesses must face in their ongoing operations—currency management.
The process of managing different currencies is often a challenge. From exchange rates to prepayments, vendor payments to value-added tax, businesses need an accurate and auditable picture of their financial standing to understand where they are and what they will need to do.
Currency Management: Minimizing Growth Risk
Whether you are looking to expand internationally or are already well established around the world, one of the biggest challenges and risks faced by growing businesses is that of financial risk. From inflation to instability, trying to calculate exchange rates why working with international subsidiaries, suppliers, and customers becomes harder as the volume of transactions increases.
What is Currency Management in ERP?
Currency management is a tool within financial management that simplifies the process of calculating realized and unrealized gains and losses, performing account reevaluations, and translating financial statements.
Currency management isn’t just about automating calculations as you work in different currencies around the world. It’s also about minimizing your growing midmarket company’s financial risk when currency values change dramatically.
Why Is It So Important?
Currency values change, and exchange rates fluctuate by the day, creating financial risk for companies operating across borders. While hyperinflation is rare, the sheer scale of your business means that a small percentage change in currency could result in tens of thousands of dollars. With this in mind, it pays to know where you stand and make calculations so that you know where your business stands.
What Should You Look for in Currency Management?
Currency management is a unique feature in ERP because it evaluates your business’ standing no matter where you are. Among the key things you should look for in this functionality:
- Unlimited Currency and Rate Types: Take control of the exchange rate by assigning different rate types to customers and vendors using the same foreign currency. Solutions should at least provide options for the locations in which you operate, but ideally will provide an unlimited number.
- Control of Decimals and Rounding: With different rates of variability in currency, being able to adjust the number of decimal places you count and handle rounding differences matters. Drill down into reports to monitor fluctuations.
- Automatic Calculation of Realized Gains and Losses: Automatically calculate realized gains and losses from foreign currency transactions entered into any financial module, whether they are from customers, to vendors, or between accounts.
- Plan to Adjust Unrealized Gains and Losses: Automatically prepare auto-reversing entries in General Ledger for all open documents recorded in foreign currencies.
- Simplify Financial Statement Translation: Manage subsidiaries in a wide range of currencies or prepare financial statements in the currencies you need, while automatically calculating gains and losses thanks to tight integration with General Ledger.
Acumatica Currency Management helps you increase your volume of international business while staying in control of your finances. Advanced features let you support all your international subsidiaries, vendors, and customers. Learn more about why this is so important for growing businesses here and read the Currency Management data sheet for more information.
Acumatica Cloud ERP: The Usability Leader
Finding a solution that is user-friendly and functional is a key decision process in the ERP evaluation stage. As we continue to break down the smaller components of ERP and why they matter in the bigger picture, we invite you to learn more about your path to purchase by getting a free ERP evaluation and comparison checklist from Acumatica here.
Acumatica delivers a full suite of integrated business management applications unlike any other ERP solution on the market today. Offering a wide range of products for unique industry needs, Acumatica ERP features a strong cash management application for businesses who need a flexible, adaptable, and robust ERP solution that will grow with them.
Acumatica Accounts Payable is part of the Acumatica Financial Module and integrates with other necessary functionality based on your industry and unique needs. Learn more about Acumatica Financial Management, your path to making an ERP decision, and contact us to learn how we can help you.