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When to use System Currency differnet from Local Currency?

syed_aleem3
Explorer
0 Kudos

Hi Forum,

I always thought, a system can generate any report in local currency anyways. For example a Canadian Company would have local currency as Canadian dollars and Indian company in Indian Rupees.

However, considering the fact, most international transactions are done in US dollars (or any other reason), we have the option of making System currency as US dollars. This way, it is possible to have all Financial and Accounting reports in two currencies that is Canadian dollars (local currency) and US dollars (which is system currency).

I always thought the option to have System Currency as another currency is a PLUS for getting reports in two currencies.

Of course we can have Customers and Vendors who use multi currencies and G/L accounts that have multi currencies for supporting currencies besides the Local and System Currency.

Here is the Question?

Are there situations where it is advantageous to have both Local and System Currency the same in my case Canadian Currency? Especially, from this perspective - What happens when this Canadian Company starts a subdivision in USA and the US company will have Local Currency as US dollars and their System Currency as Canadian Dollars. Now the two subdivisions have a different currency. Does that hinder in anyway. Is this an example to make that drives the fact a Canadian Company should always have Local and System currency as Canadian, because whenever US company comes along, the US company would be their local as US and System as Canadian, thus enabling the Canadian company to get what ever they want in System Currency.

Thanks for your contribution to this discussion.

Accepted Solutions (1)

Accepted Solutions (1)

syed_aleem3
Explorer
0 Kudos

Anyone please?

Again to summarize - If a company is multi-national is it necessary to have the system currency (of all SAP B1 country installations) as the local currency of the home country of the multinational company.

Eg. SAPB1Canada is the home company in Canada.

Option 1

SAPB1Canada ->

Local currency : Canadian Dollar

System Currency : Canadian Dollar

US Subsidiary

SAPB1USA

Local currency : USD

System Currency : Canadian Dollar

UK Subsidiary

SAPB1UK

Local currency : UK Sterling

System Currency : Canadian Dollar

By making the System currency same as the home currency of the company, the consolidation of Financial records becomes easier. Is the above statement true? Could you please compare above with the following below configuration below:

Option2:

SAPB1Canada ->

Local currency : Canadian Dollar

System Currency : USD

US Subsidiary

SAPB1USA

Local currency : USD

System Currency : Canadian Dollar

UK Subsidiary

SAPB1UK

Local currency : UK Sterling

System Currency : Canadian Dollar

Please compare between opton 1 and option 2. Which has what advantages for a multi national company consolidation.

Thank you.

Former Member
0 Kudos

Hi,

Both options will work.

I prefer the 1st option because this is easier to maintain.

Thanks,

Gordon

Former Member
0 Kudos

I agree with Gordon. I f you have several divisions in different locations, the System Currency should be consistent to enable consolidated reporting to be completed, and the local currency should match that of the location to enable tax and legislative reporting in the localisation.

Answers (0)