In this video, let us understand the basics of currencies. 1
OK, so by this time, I am sure that you know that D365 allows the multi-currency transactions. 2
Correct. 3
So currently we are dealing with the U.S. M.F. Company. 4
Right. 5
And this uses U.S. dollars as the accounting currency. 6
OK. 7
And it is quite possible that you will be able to post the transactions in non USD currency 8
Right. 9
So let's go and take a look at our journal. 10
So I'll just quickly create one transaction for you. 11
So if you take a look at this here, I have this account and when I'm entering the transaction so I 12
can set up the currency here as euros. 13
OK, so I'm telling the system that I am posting this transaction in euro currency. 14
Correct. 15
So the moment that you choose this to be a euro currency, then I can see that whatever the value that 16
I provide here that is converted into the USD value. 17
So you have this thousand euros, which is nothing, but this 1369 U.S. dollars. 18
OK, so on journals, you will see the currency conversion rate here. 19
OK, so this is the currency conversion which says that the currency conversion between the USD and 20
EUR is this. 21
Right. 22
So certainly for all of this to happen, being consultants, we will have to configure the currency's 23
exchange rates, etc.. 24
OK, so that is where we are looking at some of the configurations now. 25
Firstly, let me introduce you to the currency area within the application. 26
So within General ledger module, if you scroll it to the right and then you see this currency section. 27
OK, so the first thing is you have a currencies master, so you go to the currencies and you see the 28
different currencies listed here. 29
So you don't need to create all of these currencies manually. 30
So with the default setup, I mean, when you purchase the D365 license, so though you do not load the demo 31
data you will have 32
These currencies are by default coming in your currencies master. 33
OK, so certain fields that you might need to be just, you know, have an idea about is this rounding 34
rules. so you will be able to provide the rounding rules here. 35
OK, so especially, you know, when the currency conversions happen, there will be decimal 36
places, right? 37
So there could be some 100.10 something like that 38
So in such scenarios, how do you want the rounding to be handled. so you can set up the rounding rules 39
here for different documents like sales orders? 40
What is your rounding principle is and for purchase orders and fixed asset depreciation, etc.? 41
OK, so that is the only piece that I would say will be needed for you guys as consultants. 42
So that is about the currencies master. 43
And now let's take a look at the exchange rate types. 44
OK, I will have to again take my Excel to explain about this exchange rate types. 45
This is similar to the concept of the chart of accounts. 46
OK, so what happens is you have your multiple companies, especially in a scenario where you are implementing 47
to multiple legal entities. 48
So you have your USmF and USRT companies and you want both the companies to follow the single 49
currency conversion rate. 50
So you don't want to go to each company and define what is your currency conversion. 51
So what Microsoft did is they came up with the similar configuration approach, like the chart of accounts. 52
What you do is you define something called exchange rate type, OK? 53
And within that exchange rate type, you define your currency conversions like between USD to Euro and 54
USD to INR. 55
Let's say this is my conversion rate. 56
And here this is my conversion rate. 57
Something like this, right? 58
So you are giving a name to this exchange rate type called default, and then what you do is you will 59
link this to your USMF 60
And USRT companies then automatically what system can do as it can look into this table and it can 61
pick up the exchange rates? 62
OK, let let's just see this in the system to get more familiar with this. 63
So you look at this one here. 64
I have the exchange rate table and within that, let's review this default exchange rate type. 65
And I have this exchange rate. 66
And this is where I can define the currency conversions. 67
OK, so you take a look at this one 68
begins with USD here. 69
Yeah, you take a look at this one here. 70
So this is the currency conversion for USD and euro. 71
OK, and this is a conversion value. 72
All right, so this is how you define your currency conversions, the exchange rates. 73
OK, and let's review how this default is connected to the U.S. MF company. 74
All right. 75
So let me just go to another tab. 76
Let us go to the. 77
General ledger module. 78
Here I go. 79
Scroll it and find your ledger. 80
So as consultants, when we are setting up the ledger form, what we do is we will tell the system what 81
is the exchange rate type that has to be used. 82
So you see here. 83
So here it is pointing to the default table. 84
So now whenever we are doing the transactions system knows that, yes, it has to look for the default 85
exchange rate type. 86
OK, so then system gets into this exchange rate type and go to this default and looks into this exchange 87
rates. 88
OK, so that is conceptually, that is how it works. 89
Now what we do quickly is let us see how do you create a new conversion rate. 90
OK. 91
And how is this conversion is happening. 92
Correct. 93
So let us go back to the currency exchange rates and here. 94
Um. 95
Between USD and EUR. 96
So you have the currency conversion factor. 97
So how do you want to define your currencies? 98
I mean, how do you want to define your exchange rates? 99
So is it like do you want to see that? 100
How many euros? 101
for hundred USD or how many euros for one USD 102
So that that is what will be determined by the currency conversion factor. 103
So you can see here I define the exchange rate here as 73 here, which is like seventy three euros. 104
Four hundred U.S. dollars. 105
OK, so if we want to be in a position to define the conversion factor for one unit, then you see 106
here you set up the conversion factor for one unit and you see here for one U.S. dollar. 107
How many INR? 108
OK, so what I want to do now is I want to define a different currency rate between USD 109
and INR. 110
So I come to this table USD and INR and I add the exchange rate and I see that this is applicable from 111
today's date. 112
And the exchange rate is, by the way, whenever you want to see that it is from today's date, you 113
can just type in T here then automatically gets you the current date. 114
And here I put the currency conversion rate is 73. 115
OK, so that is 73 INR for one USD 116
OK, so if I want that to be typically showing up in 100 units, then I can put it 200 here. 117
And you see here the values are converted to this. 118
OK, so let's leave it to this. done and let's go back to the journal voucher and see how the system gets 119
the new value. 120
So the same thousand transactions that we are posting here. 121
I'm telling the system that this is INR. 122
OK, so you go to the conversion. 123
And you see here, system is giving the conversion as between USD to INR is this. OK 124
So certainly it can do that calculation for you, because the way that we defined is 73 INR 125
for one USD. 126
Right. 127
Then the transaction that we are entering right now is 1000 INR. 128
So what is the value of it in U.S. dollar. 129
Correct. 130
So. 131
So it can automatically do that thing like one divides by 73, which is this and that is what is the 132
conversion that you are seeing here. 133
OK, and multiplied by a thousand is is this value. 134
OK, so that is how you can define the currency exchange rates in D365 135
I believe you are clear. 136
And that's all for this video. 137
Thank you so much.