One of the more common and mundane tasks for companies that have a multi-national presence is currency conversion. Revenue and expenses are booked in multiple local currencies, but this data must be converted to a common, standard currency in order to create an accurate and consolidated data set across the entire organization. Often, currency neutral views of the data are also required, allowing decision makers to isolate the impact of currency rate changes. A common example of this is a requirement to see your current year actuals compared to the budget. The budget was likely created in a different set of rates than the actual rates, so a currency neutral view must be created to eliminate the impact changes in currency had on the bottom line.
While some (but not all) aggregation tools have built-in currency conversion processes, they’re strangely cumbersome to set up and use for such a relatively simple task. Additionally, these tools typically require you to copy the entire data set, convert the data to the new currency, and aggregate the new data set, requiring duplication of not only the storage space to accommodate the data but also the time it takes to get the aggregated results when data is updated. This duplication (or more!) of storage space and processing time becomes even more pronounced if many currency neutral views are required.
Of course, Casabase makes the whole process easier and much more efficient. Currency conversion in Casabase is not only simple to set up, it requires no data duplication and no additional processing! That’s right, once you load your bottom-level data into Casabase, not only is it instantly available at all levels of the hierarchy, it’s also instantly available at any rates you have loaded into the system. No calculations, no data copying, no wondering whether the number your looking at has been converted and aggregated. There will never be a situation where new local currency data has been loaded into the system but the converted values don’t reflect the updated data.
Casabase handles this by a feature we call Rate Groups. Rate Groups are simply a group of currency rates for a particular conversion point. For example, you will likely want to create a Rate Group called “Actuals” that contains the currency conversion rates that you use to convert your actuals to USD (or whatever currency that consolidated reporting uses):
You will enter your rates by Year, Period, Account Type, and Rate:
The Account Type value is typically used for balance sheet conversion (Period End) or P&L conversion (Period Average). Accounts will be tagged either as Period End or Period Average, and this will determine which rate is used. Similarly, typically Entities will be tagged with a Rate Name that corresponds to the currency for that particular location. Accounts and Entities (or whichever dimension you choose) can be set up either in the Admin Panel or in bulk with a Casascript. In the screenshot below, the Contoso Ottawa store is tagged as Canadian dollars:
Once the members are set up and the rates added to the Rate Group, the system is ready to dynamically convert your data for you. If you had the following retrieve set up in Local Currency:
All that you would need to do to instantly convert the data to USD using the Actuals Rate Group would be to add the Rate Group to the retrieve:
The Contoso Canada data changed because the entities tagged with the CAD Rate Name were converted at the CAD to USD exchange rate set up in the Actuals Rate Group. This conversion was done instantly, with out the duplication of data and without the need to run a separate process. If the CAD rate changed, all that would be required is a simple update to the rate, and the next time the retrieve was performed the data would automatically be updated.
Rate Groups can also be combined. The following retrieve has the base data (%None) converted to USD for actuals (%Actuals) and converted at the rates used for the FY16 budget (%BudgetFY16) for a currency-neutral view of the data:
Rate Groups give Casabase users an easy and efficient way to do all currency conversion and currency neutral reporting. The time saved from eliminating the copying, processing, and validating of data when doing currency conversion and currency neutral calculations is worth the price of the license alone! If you’d like to take Casabase for a test drive, head on over to the download page for a free 14-day trial!