Welcome to the next instalment in my series of posts describing the details of my revision to the MB2-713 certification. (Microsoft Dynamics CRM 2016 Sales.) I hope these posts are a benefit to anyone preparing for this certificate.
This time I will look at currency.
I am lucky (or unlucky) that often the customers I work with operate in just one currency. But it is becoming more and more common for even the smallest companies to trade across wider geographical areas. Via the internet it is increasingly easy to promote products in many countries. Sometimes you can “get away” with listing all your products in Dollars or Pounds but often customers in these countries will want quotes, price lists and orders in their local currency. Microsoft Dynamics CRM 2016 has the capability to handle this multicurrency scenario.
Within Microsoft Dynamics CRM 2016 you can maintain the various currencies you require in the currencies option in business management under settings. (See below.)
Within the currencies option you can configure additional currencies and their exchange rates as required. Now before we review these options lets discuss the concept of the base currency.
Whenever you first create a CRM organisation for on premise or provision a CRM on-line instance you will need to define your default (base) currency. The base currency applies to all momentary values across the whole system. For every currency stored two values are always available the base currency value and the “local” currencies for that value. Often you will find these values will contain the same information but they will start to differ when alternatives currencies are created. (We’ll look at this in more detail a little later.)
The base currency always has an exchange rate of 1. Meaning all other currency values are derived from this base. The base currency cannot be deleted and cannot be changed. (Although you can revise some details such as precision, display name and symbol.
Now we understand the base currency we can add others. Let’s imagine I trade in US Dollars and Euros in addition to my base currency of Pounds Sterling.
Currently you get €1.24 (Euro) to £1 (Pound). And $1.41 (US Dollar) per £1 (Pound.) — Or you do in my example!
The configuration details for both euro and US Dollar are actually held within Microsoft Dynamics as preconfigured system currencies. When you create these you’ll simply need to enter the exchange rate you want to use.
As you add a new currency you are prompted to select system or custom currency. (I’ll cover a custom currency in a second!) For now I am going to select a system currency.
Now because I am using a system currency I can select my currency code from one of hundreds of preconfigured currencies.
Very occasionally you might find you want to define a currency doesn’t exist. Let’s say a new currency is created (maybe something like Bitcoin) and you want to add it. Then you use the custom option, when you use a custom currency you will need to enter the currency code, name, precision and symbol. In addition to the exchange rate.
Having created the three “local” currencies I will trade in plus my base currency my currency list looks like this;
It is important to keep in mind that exchange rate changes are managed manually. If the exchange rate fluctuates you will need to change it here under the currency settings.
Using Multiple Currencies
Firstly, it is important to be aware that each user can set their own default currency. Below you can see that I have gone into user settings and changed my default currency to Bitcoin.
Having changed my default currency to Bitcoin any new records I create using a currency will default to Bitcoin. It is important to understand the implications / meaning of this. Existing opportunities aren’t going to suddenly change to be Bitcoin, they will remain in whatever currency has already been set. Also, as you can see below, whilst my opportunity has defaulted to Bitcoin if I try to apply that currency to a price list already configured to work in say pound sterling the system will give me a warning message.
On accounts, leads, contacts, products and price lists you can define a currency field. (As well as discount lists, when by amount.) Once you have set a different default currency on an lead/contact/account then any new transaction record created for them will default to that currency. (Not forgetting that you will then also have a select a appropriate price list with a matching currency.)
Note: The default currency from say account will only be applied to opportunities (etc) created directly from account. If you open a new opportunity and then manually add the account then the opportunity will default to the currency assigned to the current user.
In fact you add a currency field to any entity that contains a currency value. Meaning all of the transactional records such as opportunity, quote, order and invoice all contain a currency. (So that individual transactions can have different currencies.)
Below you can see that I am adding an opportunity to account called “Wide World Importers”. My base currency and user default currency is Pound Sterling. I changed it back from my “crazy” setting of Bitcoin!! J But because the account I am creating the opportunity from has a default currency of US Dollar you can see that the money values on the opportunity are showing in dollars.
Also understand, my default price list is likely to be in my base currency. So in my example Pound Sterling. To be able to create an opportunity in US Dollars I will also need to have created a dollar price list. (I’ll cover more detail on pricing in a later post.)
These concepts apply to all CRM entities; I just happen to be using opportunity in this example.
Having created an opportunity in US Dollars whenever I view that opportunity I will see the dollar amount in fields such as estimated revenue. But, as shown below, two currency fields exist for each money value. Meaning we can choose to show the currency amount as entered or, using the exchange rate, converted back to the base currency value.
Exchange Rate Changes
Let’s quickly consider the impact of exchange rate changes. What if the Pound to US Dollar rate changes from 1.41 to 1.8? Well firstly I’d return to my currency settings and change the exchange rate. But what does that do?
- Changing the exchange rate does not impact existing financial records.
- New opportunities (etc) will have a base amount calculated using the revised rate.
See below that I have created two opportunities in US Dollars. One before my exchange rate change and one after. They have the same dollar value but the base currency value differs.
The above actually demonstrates a potential drawback of multi-currency! Because if the exchange rate fluctuates you may need to manually amend any active opportunities to reflect the required price revisions.
I mention concept of using currencies again as I cover the product catalogue and price lists. But hopefully this post has given you a good understand of the basics of using multiple currencies in Dynamics CRM 2016. J
In my next post I will look at social engagement.