Growing businesses of all sizes today need to work with multiple markets and use different currencies. Dynamics NAV makes it easy for you to track and manage constant currency fluctuations.

The need to work with different currencies may arise if you:

  • Have offices in different countries and need consolidated reporting
  • Trade or offer services globally
  • Need to have reporting in both your local currency and an additional currency

The challenge for businesses that have a manual process to track currency exchange rates is that while your Accounts Receivables and Accounts Payables teams post the right entries, you will find inaccurate information in the consolidated reporting or while matching the balances in the bank account ledger or the General Ledger. Inaccurate information leads to questionable decisions that creates inefficiencies in the business.

You can avoid the problems stemming from human error by automating the process in your Microsoft Dynamics NAV solution.

How to automate the exchange rates update process in NAV

In order to automate the process, you should first set up the Currency Exchange Rate Services function on Microsoft Dynamics NAV. This is a tool that helps you to connect with external service providers like Yahoo, Bank of Canada, European Central Bank, etc.

Navigate to the Currency Exchange Rate Services window by using the search option. If you haven’t added an exchange rate service provider, click on “New”. The action will open a new window where you have to enter the code, description, etc. Choose the code and description and enter the url of the service provider in the Service url section.

In order to map the required currency exchange rate fields, scroll down to the “Field Mapping” section on the same window. Under the “Parent Node for Currency Code” row, click on “Source” section. You should see ellipsis that will take you to the “Edit – Select Source” window. You can select the currency for the parent node here and click “ok”. You have to do the same for all the fields in this section.

In the last row – Relational Exch. Rate Amount – you can enter the default value. For example, if you are using Euro, you must enter 1 in the “Default Value” field, which means the system is comparing the foreign currencies to 1 Euro. In order to check if the system has been setup correctly, click on the “Preview” and check the values.

Why businesses add a second local currency

Businesses that have a presence in multiple countries would need to have an additional currency added to Microsoft Dynamics NAV. Reporting in an additional currency will help decision makers in different countries get a more accurate sense of performance.

When you add a second local currency in Dynamics NAV, it automatically stores each ledger entry in both currencies. In order to view the amounts in different currencies, go to the specific general ledger window and you will be able to view the amounts in the other local currency by selecting the “Show in Add.-Currency” option.

What is exchange rate adjustment?

Since exchange rates fluctuate, it is important to setup a system where the exchange rate amounts recorded in Dynamics NAV are updated and adjusted on a regular basis. This will help keep your data accurate by capturing the variation in the exchange rates.

While the features of Dynamics NAV have helped businesses around the globe to streamline their operations and grow, the solution has reached the end of its life-cycle and may not be in a position to support the growing needs of your business. That is why businesses are now taking a step up to Microsoft Dynamics 365 Business Central.