Business Central How-To: Currency Exchange Rates
If you trade in different currencies, you need to keep track of the changes in currency exchange rates. Business Central helps you manage and update the exchange rates manually or automatically and set up a currency exchange rate service.
The exchange rates are the tool to calculate the local currency value (LCY) of each currency transaction. The Currency Exchange Rates page includes the following fields:
| Field | Description |
|---|---|
| Starting Date | The date when the currency rate was effective. |
| Currency Code | The currency code related to this exchange rate. |
| Relational Currency Code | If this currency is part of a triangular currency calculation, then you can set up the related currency code here. |
| Exchange Rate Amount | The exchange rate amount is the rate for the currency code selected on the line. Normally 1 or 100. |
| Relational Exch. Rate Amount | The relational exchange rate amount relates to the rate to use for the relational currency code. |
| Adjustment Exch. Rate Amount | The rate for the currency code selected on the line for the use of the Adjust Exchange Rates batch job. |
| Relational Adjmt Exch. Rate Amt | The rate for the currency code selected on the line for the use of the Adjust Exchange Rates batch job. |
| Fix Exchange Rate Amount | Specifies if the currency’s exchange rate can be changed on invoices and journal lines. |
In general, the values of the Exchange Rate Amount and Relational Exchange Rate Amount fields are used as the default currency rate on all new receivables and payables documents that are created going forward. The document is assigned the currency rate according to the current working date.
Note: The actual currency rate is calculated using this formula:
Currency Amount = Amount / Exchange Rate Amount * Relational Exch. Rate Amount
The adjustment exchange rate amount, or the relational adjustment exchange rate amount, updates all open bank, receivables, or payables transactions.
Because exchange rates fluctuate constantly, you need to adjust other currency equivalents periodically. If you don’t, amounts you converted from foreign (or other) currencies and posted to the general ledger in local currency can be incorrect. Also, you need to update daily entries posted before you enter a daily exchange rate.
You can use the Adjust Exchange Rates batch job to manually adjust the exchange rates for posted customer, vendor, and bank account entries. The batch job can also update other reporting currency amounts on G/L entries.
You can also specify how the adjustment handles dimensions for unrealized gains and losses postings by choosing one of the following options in the Dimension Posting field:
- Source Entry Dimensions: Transfer dimension values for G/L entries for unrealized gains and losses from the entry you’re adjusting.
- No Dimensions: Don’t transfer dimension values for unrealized gains and losses to G/L entries. Business Central still uses default dimension settings, for example, Code Mandatory, Same Code, or No Code. If the source transaction entries have dimension values, the adjustment creates entries without dimension values.
- G/L Account Dimensions: Transfer dimension values from the unrealized gains and losses G/L account’s dimension settings source entry to G/L entries.
Tip: You can use a service to update exchange rates automatically. However, this doesn’t adjust exchange rates on already posted transactions. To update exchange rates on posted entries, use the Adjust Exchange Rates batch job.
If you’d like to discuss more about Business Central’s many efficiencies and how to use them, or about making the move across to BC, reach out today to Brookland Solutions for a no obligation discussion. Get in touch!
February 3, 2025
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