TABLE OF CONTENTS
SoftLedger is a multi currency system that can create transactions in all fiat currencies and convert them to the reporting currency of your Locations. SoftLedger uses the openexchange rates API to bring in all daily currency pair values. At the end of each month, you can choose to provide a different rate for currency pairs when closing the Forex Accounting Period.
Identify all Ledger Accounts to be revalued
For any Ledger Accounts that need to be revalued at month end, ensure that Revalue Forex Rates is checked when creating or editing Ledger Accounts under Financial>Accounts:
Revalue Forex Rates
Under the Accounting Periods section, click the lock button under Forex, for the period you want to close. For any Locations with transactions booked in currencies that are different than the reporting currency for that location, you have the option to set a new rate:
For example, once you click Save Rates and then Approve Re-Valuations on the next tab on the screen above, the following will happen:
- A Journal Entry will be recorded for any gains and losses resulting from the change from the original transaction rate
- The balance for any Ledger Accounts set to be revalued will be adjusted accordingly
Set the Forex Gain/Loss Account
Before closing the Forex module for any Accounting Period, be sure that you have the Forex Gain/Loss Account set under the Location details as in the image below:
If you would like to use a different Forex Gain/Loss Account for each Location within SoftLedger, you can set a Ledger Account under the Location details in Financial>Locations.
Foreign Exchange Rate Methodology
While we cannot explicitly name the providers for calculating exchange rates, these include central and commercial banks worldwide, FX brokers, market data vendors, and research organisations, numbering over 50 in total, and taking into account multiple timezones and markets.
The platform calculates spot rates for the most part based on order book data, multiple times per second during market opening hours, taking a time-weighted average of the best available bid and ask quotes. These are then made available to our clients, up to every whole second as they become available.
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