Exchange Rate

Multiple Currencies in your Free Purchase Order Software

We’ve had a few requests for a blog post that explains how Currency Conversion (multiple currencies) works in the Free Version of SpendMap, that is, what happens in SpendMap when you place Purchase Orders in currencies other than your own (landed) currency.

In a nutshell, when you set up a new supplier, you can tell SpendMap the currency to use (i.e. the currency the supplier’s Purchase Orders and invoices will be in), and then SpendMap will convert those orders to your local/landed currency for internal reporting purposes.

Here’s how it works…

Step 1 – Your Default/Local/Landed Currency

First things first, you need to set up your local/landed currency.  That’s the currency SpendMap will use for internal reporting.  We’ll use United States Dollars (USD) for this example.

Step 2 – Your Supplier’s Currency

Next, tell SpendMap which currency to use for each supplier.  Let’s say that a Buyer in the USA is ordering something from a supplier in Canada to make the most of the strong US dollar…

Step 3 – Purchase Orders in Your Supplier’s Currency

Now, when you process Purchase Orders for that supplier, the orders will be in the supplier’s currency (Canadian dollars in this example)…

Step 4 – Currency Conversion (Reporting in Landed Currency)

In most cases, orders that are placed in your Supplier’s currency will be converted to your local/landed currency for reporting purposes, so that you can “compare apples to apples”.  For example, your budget reporting, inventory valuation, spend by supplier, and similar reports that might include purchases in many different currencies, will be converted to your local/landed currency for easy comparison.

For example, here’s the Spend by Supplier Report, showing that we just spent US $730.20 (not $1,000) with our friendly Canadian supplier…

I say “in most cases” because there are a few exceptions where you still might want to see your supplier’s currency, in which case SpendMap will ask you whether you want to use your supplier’s currencies or your landed currency.  The PO Listing Report is a good example.

Step 5 – Update Exchange Rates

Since exchange rates between currencies fluctuate all the time, you should update the Rate Field (the exchange rate) for each currency code in SpendMap from time to time.  You can do this manually in the Tax and Exchange Rate Master File, or check out this blog post to learn how to automatically update the exchange rates from Yahoo! Finance.

Auto-Update Currency Exchange Rates in your Free Purchase Order Software

CurrencyIf you’re using multiple currencies in SpendMap, you might be tired of updating the Exchange Rates for your Currency Codes all the time.

To save you some time and effort, we added a new feature in version 14 of SpendMap that can be used to update all exchange rates in SpendMap with current rates available on the Internet (from Yahoo! Finance), as opposed to having to update the Rate Field for each Currency Code manually.

Here’s the menu path in SpendMap…
– PURCHASING > Master Files > Tax and Exchange Rates > Update currency exchange rates from the web

As the online Help for that utility explains, you can either run this menu option manually from time to time or you can use the setting “Exchange rate update option” in User Defined Field Defaults to instruct SpendMap to update the exchange rates automatically once per day…
– PURCHASING > Setup system > User defined terminology and settings > User defined field defaults

If you use multiple currencies in SpendMap, updating the exchange rates frequently is recommended so that the landed dollar values for each transaction (which affect budgets, spend reporting, etc.) will be as accurate as possible.

Currency and Tax setup in free Purchase Order Software

We’ve had a few support tickets from folks in the United Kingdom, asking how to change the default currency in SpendMap from dollars ($) to pounds sterling (£).

The question usually comes alongside another question about how to set up Value Added Tax (VAT) as the default sales tax rate in the system.

So this blog post outlines the options for changing the default currency and taxes in the free version of SpendMap.  I’ll use “pounds” and “VAT” as the examples, but SpendMap supports other currencies and taxes too, which you can set up in the Tax and Exchange Rates Master File.

Setup Wizard

First things first, I guess I should mention that you will be prompted to select your currency and default taxes during the Setup Wizard, which will run automatically when you log into your Live (Production) copy of SpendMap for the first time.

If for some reason you want to change the currency or taxes in the Evaluation copy of SpendMap (the sample data in the Evaluation copy uses dollars ($) and a generic tax code of “TAX 1”), or if you just missed that part of the Setup Wizard the first time you ran your Live copy, keep reading to learn how to change the default currency and taxes after-the-fact…