Why multi-currency reporting software is essential for global companies

In a global economy, many companies operate across borders and manage teams, supply chains and customers in various countries. These organizations have to cope with a complex web of foreign currency transactions, exchange rates and multiple currencies while needing to generate consistent and accurate financial statements.

At the heart of this challenge is the need for flexible multi-currency reporting. Finance teams need the right tools to support currency conversion, financial reporting in a single currency and real-time visibility into financial performance. This is where Phocas BI and FP&A is useful by offering powerful multi-currency features that enable business people to meet both consolidated reporting requirements and analyze and compare performance across all divisions.

Here’s a typical multi-currency reporting requirement

Imagine a multinational business with divisions in America, United Kingdom and Australia. Each division operates in its local currency—USD, GBP and AUD respectively. The business is likely to conduct sales, maintain bank accounts and manage receivable balances in its local currency, but for consolidation and financial reporting, the head office needs everything presented in one reporting currency say, Australian dollars.

This is lots of effort without the right tools. Organizations need to align their ERP, financial and general ledger data with accounting regulations such as GAAP, apply correct currency exchange rates and deal with exchange rate fluctuations that impact profitability, cash flow and balance sheets. A mistake in conversion or reporting can lead to discrepancies, or regulatory problems or poor decision-making.

Companies can tackle this reporting by converting each division transaction currency to the base currency daily, before generating month-end reports or compiling budgets. This process is time-consuming and often disconnected from real-time data if you are using Excel. And did we mention the file might break just as you are ready for the conversion?

How Phocas BI and FP&A can help

Phocas provides an all-in-one BI and FP&A solution designed to streamline and automate this complexity. With built-in multi-currency accounting capabilities, Phocas enables organizations to report across various currencies while consolidating everything into the designated reporting currency all within a powerful data platform that enhances financial management.

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Phocas’ multi-currency features allow organizations with multiple entities in different currencies to consolidate and display financial statements such as Balance Sheet, Profit and Loss, and Cash Flow in a single reporting currency.

Finance teams can quickly generate comprehensive and compliant financial statements in USD, while capturing the nuances of each entity’s foreign currency performance.

Real-time currency conversion

Phocas supports real-time or periodic exchange rate updates to reflect true market dynamics. This ensures that financial reports reflect the latest currency exchange rates. It makes foreign exchange impacts clearly visible and easy to analyze and there is full transparency around exchange rate fluctuations and their effect on performance.

You can upload exchange rate data daily, weekly, or monthly depending on your business requirements. This flexibility supports everything from fast-paced retail environments to longer-cycle reporting needs.

Functional and reporting currency flexibility

Each business entity within Phocas can have its functional currency, while the group sets a standard reporting currency. Whether it’s the euro, USD or any other standard, Phocas converts the local currency to the reporting currency for full-group visibility.