I would like to get some feedback on what might be the most effective setup for multicurrency. I am working with a client that is based in the US with over 125 databases. They currently have one UK company that is being converted over to Dynamics. They are the only company not using US dollars. Normal operations in the past were to allow the UK company to process everything in pounds and when the information was posted to the US (summary GL journal only), a month end process was run offline to revalue pounds to dollars using a EOM rate for balance sheet (with historical on PPE) and average monthly for income statement items. The US company still wants to do exchange rate revaluation only at month end.
As I see it there are at least 2 options and I would appreciate some feedback on what would be the most efficient.
1. Set up the UK company with functional currency UK pounds, reporting currency US dollars. If you enter everything in pounds you must use FRX or Management reporter to do the conversion for you. Management’s concern here is that they do not want to have to do the calculation of exchange rate and if they do consolidated reporting the reports will not be correct. This can be addressed with a report specific to the UK company and the converted amounts pulled in via use of a tree.
2. Set up the UK company with functional currency US dollars, with all accounts having the ability to use UK pounds and force all entries to be done using the originating debit and credit fields. From my understanding, after you have set up the multicurrency rate and assigned accounts, then when you do a revalue the currency exchange gain or loss would be calculated. My concern using this method would be that it is easier for reporting at month end, but during the month for processing the UK folks will have to be sure to enter the transactions in originating currency for gl, and originating debit and credits for payables. I would worry that there could be some error and that some things would be posted in US dollars. The UK company does have a UK install.
I need to make a decision in this week and before I make my presentation to management, I would appreciate some feedback.
THANK YOU