8/11/2011

Multicurrency Support in Project Accounting

Multicurrency is one important area and understanding it’s treatment in Project Accounting module of Dynamics GP is essential for a successful PA Implementation.

  1. Multicurrency is assigned in Billing currency ID in PA
  2. Originating currency is assigned for the contract first for it to be assigned to all projects under the contract. Later, the same currency is rolled on to projects.
  3. Currency for the contract and the currency for any or all of the projects under the contract cannot be different. Example: If Currency for Contract A is USD, Currency for Project A1 under contract A cannot be assigned to CAD and instead uses USD.
  4. Change orders are not supported by Multicurrency. In other words, change order tracking will be disabled if an originating currency other than functional currency is used in Contract as well as Project.
  5. Profit Types of Billing Rate and None are the only profit types that can be used on Multicurrency billing projects in PA Budgets.
  6. Multicurrency can be used with Time & Materials projects that use When Performed or When Billed accounting methods and Fixed price projects only. However, as mentioned in Point 5 above, cost categories with profit types Billing rate and None shall be used and other profit types are outside the support.
  7. Cost Plus projects are not supported by Multicurrency projects.
  8. Purchases/Material Transaction Type in Cost Categories with Inventory Items marked cannot be used on Multicurrency Projects. So, In effect, If we have a T&M Project with Billing rate profit type but has Inventory materials to be estimated and consumed for a project, the multicurrency cannot be used.
  9. Fee amounts can be entered in Multicurrency only if the Fee Amount is used as a calculation method. In other words, % Baseline cost or % of Baseline revenues cannot used.
  10. Billing shall be processed only in Billing currency ID and it cannot be even billed in functional currency if Multicurrency is used. Example: Billing currency ID is AUD. Functional Currency is USD. A Bill cannot be generated in USD but should be in AUD only.
  11. If functional currency is assigned to Billing currency ID, however, the billing can be generated in both functional currency or any other currency.
  12. Exchange rates can vary between Actual cost transactions and Billing. So, If actual cost is posted as AUD10000 @ 1.20 currency factor in functional currency USD, the total cost is $12000. At the time of billing, if the exchange rate is @ 1.50, the total cost becomes $15000. Difference of $3000 is posted to Unbilled Revenue and Unbilled AR accounts.
  13. Actual Cost transactions can be posted in any currency irrespective of the currency assigned for the project. For example, If AUD is assigned as Billing currency and Functional currency is USD, then I can use AUD, USD or even CAD.
  14. The Project status also affects how the Multicurrency is treated in PA. If the project status is Estimate, then the PA Baseline Exchange rate is used and if the project status is Open, then PA Forecast Exchange Rate is used. This rate can be assigned by accessing these windows by clicking little arrow next to Billing currency ID in PA Maintenance window. Based on the Project status, the window displayed would either be of Baseline or Forecast.
  15. The billing amount would not change if the exchange rate changes instead the difference will be adjusted in functional amount thereby passing the risk to project budgeted costs.