Mastering Multi-Currency Accounting with Exchange Rate Revaluation

Guides & Tutorials
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Introduction

Welcome to our comprehensive guide on how to use the Exchange Rate Revaluation feature in Empress. This feature is an invaluable tool for businesses operating in a global marketplace, dealing with multiple currencies in their accounting.

What is Exchange Rate Revaluation?

In Empress, you can conduct your accounting in multiple currencies. If your company has a foreign currency bank account, you can make transactions in the respective currency. Empress then displays your balance in that specific currency.

The Exchange Rate Revaluation feature is designed to adjust the balance in your General Ledger accounts according to fluctuations in currency exchange rates. This is particularly useful when closing your books and updating your firm’s General Ledger accounts with funds from other currency accounts.

Accessing Exchange Rate Revaluation

To access the Exchange Rate Revaluation feature, follow this path:

Home > Accounting > Multi Currency > Exchange Rate Revaluation

How to Set Up Currency in an Account

Setting up multiple currencies in your account is straightforward. Follow these steps:

  1. Assign the accounting currency to an Account record to initiate multi-currency accounting.
  2. When creating a new account, you can specify the currency from the Chart of Accounts.
  3. For existing accounts, open the specific Account record to assign or modify the currency.
  4. To edit the currency, select the Account and click on Edit.

How to Enable Exchange Rate Revaluation

The Exchange Rate Revaluation feature is designed to handle instances where different accounts in your Company’s Chart of Accounts are held in different currencies. Here’s how to enable it:

  1. Navigate to: Setup > Company > select the company.
  2. Fill the ‘Unrealized Exchange Gain/Loss Account’ field in Company DocType. This account balances any differences between total credit and total debit.
  3. Navigate to Accounting > Setup > Exchange Rate Revaluation > New.
  4. Select your Company.
  5. Click the ‘Get Entries’ button. This action fetches accounts operating in a currency different from your Company’s ‘Default Currency’.
  6. If a new exchange rate has not been set in the Currency Exchange DocType for that currency, it will be fetched automatically. Otherwise, the ‘Exchange Rate’ set in the Currency Exchange DocType will be fetched.
  7. After submitting, a Create Journal Entry button will appear.
  8. Click this button to generate a Journal Entry for the Exchange Rate Revaluation.
  9. Submitting the Journal Entry will reflect the changes in your general ledger.

Automating Exchange Rate Revaluation Creation

Empress offers an option for automated creation of Exchange Rate Revaluation in the Company master under Exchange Rate Revaluation Settings.

In conclusion, the Exchange Rate Revaluation feature is a powerful tool for businesses dealing with multi-currency transactions. It simplifies the process of accounting for exchange rate fluctuations, making your accounting tasks easier and more accurate. For further assistance, please refer to our additional resources or reach out to our support team.