Digital innovation has transformed the way the world does business. Technology has given us access to goods and services anytime, from anywhere in the world. This interconnectedness means companies are doing business cross-borders more than ever before.
A recent Wells Fargo survey found 81% of US companies not only expect international business to increase but believe it’s vital for growth. And it’s easy to see why. Access to untapped markets, new suppliers, and specialized talent holds great potential. While going global opens the door to new opportunities, it also introduces challenges, including unique exchange rates, currencies, taxes, reporting, laws, and regulations.
Is international business—in any capacity—happening, or on the horizon for your company? If so, it’s critical your ERP system can handle multicurrency processing. Or, if you’re using other software, ditch the integrations and adapters by bringing everything together under JD Edwards Financials. Below, we’ve highlighted 4 reasons why utilizing JD Edwards Multicurrency Processing can help you capitalize on your international presence.
1. Exchange Rates
JD Edwards Multicurrency Processing ensures your transactions are accurate and based on the most current exchange rates. It allows for automatic daily updates, which is a big driver for companies doing business with many currencies. It also provides the ability to set up and store different levels of exchange rates for various processes. For example, you may want to use a daily rate for AP/AR transactions and a monthly average rate for P&L statements. By utilizing JD Edwards Multicurrency Processing, you’ll have the insight to better understand how rate fluctuations affect your bottom line.
2. AP Currency Conversions
By utilizing JD Edwards Multicurrency Processing, you’ll be able to recognize gains or losses when paying invoices. A simple example, let’s say you entered a €1,000 AP voucher when the USD/EUR exchange rate was 1. If at payment the exchange rate was 0.82, you’d recognize a $219.51 loss on that transaction. This also applies to unpaid transactions sitting in AP—increasing the accuracy of your reporting. This is great for companies who process large volumes of foreign transactions, as gains or losses could be significant.
3. Closing Process
Closings are easier using JD Edwards Multicurrency Processing. If you invoice customers in foreign currencies, you can run AR conversions in the same way previously described for AP. This gives you an accurate picture of financials at month- or year-end. Additionally, you can run restatements on a transaction level to help prepare for consolidation. This is critical if you’re operating in a highly inflationary environment or involved in government accounting where you must track every transaction.
4. Consolidated Reporting
Consolidated reporting is where you’ll see the most value from the JD Edwards Multicurrency Processing functionality. You’ll need to provide consolidated reports at some time, whether they be for statutory or management reporting. Multicurrency Processing brings financial data together from all companies or locations and allows you to report in a single base currency. If you’re using external solutions—like Excel, Hyperion, or SAP—or even a homegrown program, bringing it within JD Edwards will streamline your reporting processes.
It’s easy to see how JD Edwards Multicurrency helps improve the accuracy of your reporting and simplifies the processes along the way. By supporting the world’s 190+ legal tenders (we’ll save a Bitcoin post for another day!), it’s easier than ever to do business with anyone, anywhere.