Definition: What is it?

Foreign exchange rates used to convert one currency to another.

What is it used for?

Usually a business will want to work in one main currency (eg GBP) but will allow transactions in other currencies (eg EUR, USD). These other currencies will need to be converted to the main currency at some point in order to generate financial reports (eg Balance Sheet or P&L) and (most importantly!) to adhere to tax authority regulations.

OFBiz currently allows you to input up to 3 different rates for same currency conversion by using the 'Purpose' field. With this you can specify whether the conversion is to be used internally, externally or leave the field blank.

NOTE: Need to investigate some potential open points and options about this because

• The current screen doesnt allow you to specify when the exchange rate begins - the default is the current date
• Adding a new exchange rate for the same currency automatically expires the previous one
• A transaction that occurs on a specific day could use the specific rate but you may not know or input that rate until the following day
• If you hold an bank account in a currency that is not your main currency then that account needs to be re-valued at the end of each month using the Inland Revenue Department (IRD) specified conversion rate (as is required in NZ)
• All transactions (eg Income) to the General Ledger in a foreign currency also need to use the IRD rate. The rate is not known until after the end of the month required for re-valuation - so may need some form of currency re-valuation process.??? 

• Would we ever have the case where you would want to put in an end date for a currency conversion but no new one? (eg like changeover to Euro when all other european currencies were no longer supported?)

What's on the screen?

TO DO : Add a screen shot

How do I add a new foreign exchange rate?

Example: To add a new rate for US dollars (USD) to Euro (EUR)

1. Select 'USD' in the 'From Currency' the drop down list. (NOTE: if you have set your default currency in the general properties file then this will default to your main default currency)
2. Select 'EUR' in the 'To Currency' drop down list.
3. The 'Purpose' field can be left blank or you can select 'Internal Conversion' or 'External Conversion' from the drop down list
4. Enter the exchange rate in the 'Rate' field (eg 0.72883) 
5. Click the 'Update Foreign Currency Rates' button

The new foreign exchange rate will be displayed.

NOTE: The start date and time of the new rate will be the current date and time.

How do I update an existing foreign exchange rate?

NOTE: Existing foreign exchange rates do not get updated - instead the existing rate is expired and a new one created. However you can currently create 3 different foreign exchange conversions by using the 'Purpose' field to distinguish them.

Use the same steps as adding a new foreign exchange rate.

How do I delete / expire a foreign exchange rate?

NOTE: Existing foreign exchange rates cannot be deleted via the current exchange rates screen. Currently rates can be expired by adding a new exchange rate for the same currency conversion and purpose.

Use the same steps as adding a new foreign exchange rate.