Currency and Exchange Rates in Reports

Ordway converts foreign-currency amounts into a reporting currency using different exchange-rate methods, depending on the report, the underlying transaction or contract, and the posting status of the amount. Some reports use the exchange rate saved on a transaction, journal entry, or subscription contract. Other reports use the currency conversion rules configured under Finance settings to calculate unposted or projected billing and revenue amounts.

Understanding which method applies helps explain why amounts can differ between reports and why historical amounts may differ from projected amounts in the same report.

This article explains which exchange rates supported reports use, how Finance settings affect currency conversion, and how to configure those settings.

Table of Contents

• How Currency Conversion Works in Ordway
• Reports That Use Saved Exchange Rates
• Currency Conversion for Billing, Invoices, and Revenue
• Deferred Revenue Waterfall Report
• Configure Currency Conversion Settings
• Frequently Asked Questions

How Currency Conversion Works in Ordway

Ordway does not use the same exchange-rate method for every report. The applicable method depends on the report, the underlying record, whether the amount has been posted, and the currency conversion settings configured in Finance.

Saved Exchange Rates

Some reports use the exchange rate saved on the underlying transaction or contract when it was created.

For example:

• A/R Aging uses the exchange rate saved on the applicable invoice, payment, credit, debit, or refund.
• Account Balance uses the exchange rate saved on each journal entry.
• MRR Movements (MRR/ARR) uses the exchange rate saved on the subscription contract.
• Bookings and Contract Balance use the exchange rate associated with the subscription contract.

These reports use the rate associated with the relevant record rather than automatically applying a new daily or average exchange rate to every amount.

Configure Currency Conversion Settings

You can configure the exchange-rate methods for unposted billing and revenue amounts in Finance Setup.

1. On the left navigation pane, click Setup > Finance. The Finance Setup page is displayed.
2. Locate the Multi-Currency Accounting section.
3. Under Revenue Journal Currency Conversion, select one of the following:
   • Subscription/Order Rate
   • Average Exchange Rate
4. Under Invoice Currency Conversion, select one of the following:
   • Subscription/Order Rate
   • Daily Rate
   • Average Exchange Rate
5. Select Save.

Finance-Based Currency Conversion

For billing and revenue reports that include unposted or projected amounts, Ordway can use the currency conversion method configured under Setup> Finance > Multi-Currency Accounting.

The applicable setting depends on the type of amount and the revenue recognition method:

• Invoice Currency Conversion controls the conversion method for unposted billing and invoice amounts and for non-deferred revenue recognized on invoicing.
• Revenue Journal Currency Conversion controls the conversion method for unposted deferred revenue amounts when the revenue rule does not recognize revenue on invoicing.

These settings affect amounts that have not yet been posted. Posted amounts retain the exchange rate saved on the applicable invoice or journal entry.

Reporting Currency

Some reports, including A/R Aging and MRR Movements, provide a Reporting Currency filter. This filter lets you choose the currency in which the report displays converted amounts.

The selected reporting currency determines the target currency for conversion. The applicable report logic and saved exchange rate or Finance setting determine how the amount is converted.

Example: A/R Aging

An invoice has the following details:

The report displays 3,235.72 because the invoice amount of 808.93 is converted using the saved exchange rate of 4.

The related journal entry also shows the transaction amount of INR 808.93 and an exchange rate of 4.

This example illustrates how a report uses the rate associated with the underlying transaction. It does not mean that the same exchange rate applies to every report or transaction.

Reports That Use Saved Exchange Rates

The following reports use the exchange rate associated with the applicable transaction or contract.

The saved exchange rate can differ from the daily or average exchange rate available for the same currency. Therefore, amounts in these reports may differ from amounts calculated using a Finance-configured conversion method.

Currency Conversion for Billing, Invoices, and Revenue

For billing, invoice, and revenue reports, the exchange-rate method depends on whether the amount has been posted and how revenue is recognized.

Exchange Rates for Posted and Unposted Amounts

This distinction explains why historical and projected amounts may differ, even when they relate to the same subscription or billing schedule.

• Posted amounts use the exchange rate saved on the applicable invoice or journal entry.
• Unposted or projected amounts use the applicable conversion method configured in Finance settings.

Example

How Posted and Unposted Revenue Use Different Exchange Rates

The Revenue by Customer and Subscription report can display different converted amounts for recognized revenue and future, unrecognized revenue because they use different exchange-rate sources.

In this example, subscription S-04524 has a monthly revenue amount of INR 125 and a subscription exchange rate of 4. The journal entry for previously recognized revenue has a saved exchange rate of 0.0128.

The Revenue Journal Currency Conversion setting is configured to Subscription/Order Rate.

Posted revenue uses the saved journal entry rate

For previously recognized revenue, the report uses the exchange rate saved on the related journal entry.

The journal entry shows:

Calculation: 125 × 0.0128 = 1.60

The report therefore displays 1.60 for each applicable previously recognized month in this example.

Image: Journal entry showing the INR 125 transaction amount and saved exchange rate of 0.0128.

Unposted revenue uses the Finance conversion setting

For future, unrecognized revenue, the report uses the conversion method configured under Setup> Finance > Multi-Currency Accounting.

In this example, Revenue Journal Currency Conversion is set to Subscription/Order Rate. The subscription exchange rate is 4.

Calculation: 125 × 4 = 500

The report therefore displays 500.00 for each applicable future month in this example.

Compare the results

The amounts differ because posted revenue uses the rate saved on the journal entry, while unposted deferred revenue uses the conversion method selected in Finance settings.

This is why it's important to check both the transaction's saved exchange rate and the applicable Finance conversion setting when investigating differences between historical and projected revenue.

Available Currency Conversion Methods

Ordway provides different conversion methods under Multi-Currency Accounting. The available options depend on the setting.

Subscription/Order Rate

Uses the exchange rate saved on the subscription or order. This is the default option shown in the Finance Setup settings.

Average Exchange Rate

Uses the average exchange rate for the applicable financial period:

• For billing and invoice amounts, the applicable period is based on the charge ready date.
• For deferred revenue, the applicable period is based on the revenue schedule line.

Daily Rate

Uses the daily exchange rate for the charge ready date. This option is available only under Invoice Currency Conversion.

The exchange rates available to Ordway depend on the currency's exchange-rate configuration. The configured frequency for updating exchange rates can also affect which rate is available for a transaction.

Example: Historical and Projected Revenue

Suppose a subscription has a monthly amount of INR 125 and a saved subscription exchange rate of 4.

When Subscription/Order Rate is selected under Revenue Journal Currency Conversion, an unposted future deferred revenue amount can be converted using the subscription rate:

125 × 4 = 500

A previously posted revenue amount continues to use the exchange rate saved on its journal entry. If that saved rate differs from the subscription rate, the historical amount may differ from the projected amount.

This is expected from the distinction between saved rates for posted transactions and Finance-configured conversion for unposted amounts. The exact result depends on the applicable rate and conversion settings.

Deferred Revenue Waterfall Report

The Deferred Revenue Waterfall report uses a blended historical exchange rate for the open deferred balance.

The blended rate is based on the exchange rates at which amounts were invoiced and recognized. As a result, the converted open deferred balance can differ from an amount calculated using the conversion method selected for future or projected billing and revenue amounts.

This report should therefore be understood separately from reports that calculate amounts using a saved transaction rate or the Finance conversion settings for unposted amounts.

Frequently Asked Questions

Do all reports use the exchange rate saved on a transaction?

No. The exchange-rate method depends on the report and the underlying data. A/R Aging uses transaction-level rates, Account Balance uses journal entry rates, and MRR Movements, Bookings, and Contract Balance use the subscription contract rate. Billing and revenue reports can use Finance-configured conversion methods for unposted or projected amounts.

Do Finance settings recalculate amounts that have already been posted?

No. The Finance settings described in this article affect unposted amounts. Posted amounts retain the exchange rate saved on the applicable invoice or journal entry.

Why can historical revenue differ from projected revenue?

Historical posted revenue uses the rate saved on the applicable journal entry or invoice. Unposted or projected revenue can use the conversion method selected under Finance settings, depending on the revenue recognition method.

What is the difference between Invoice Currency Conversion and Revenue Journal Currency Conversion?

Invoice Currency Conversion controls the conversion method for unposted billing and invoice amounts and non-deferred revenue recognized on invoicing.

Revenue Journal Currency Conversion controls the conversion method for unposted deferred revenue amounts when the revenue rule does not recognize revenue on invoicing.

When is the Daily Rate option available?

The Daily Rate option is available under Invoice Currency Conversion. It uses the daily exchange rate for the charge ready date.

Why might converted amounts differ between reports?

Reports can use different exchange-rate sources. One report may use the rate saved on a transaction or subscription contract, while another may use the conversion method selected under Finance settings for unposted amounts. Differences can also arise when reports use different reporting currencies or include different types of transactions.