Dynamics 365 Business Central Tip of the Month: How to update currency exchange rates

If you trade in different currencies, you need to keep track of the changes in currency exchange rates. Whether you’re managing international vendors, customers, or subsidiaries, staying on top of currency fluctuations is critical to maintaining accurate financial records. Microsoft Dynamics 365 Business Central provides a powerful, automated way to keep your exchange rates current and reliable. This tip of the month article provides instructions on setting up and updating exchange rates in Business Central. We also explore why it’s important to regularly update currency exchange rates and how Business Central helps streamline this process to ensure your financial data reflects real-world values.

Steps:

Note: You will have to use an external service to monitor currency exchange rates.

1. Select the magnifying glass icon, enter Currency Exchange Rate Services, and then select the related link.

2. Select the New action.
3. On the Currency Exchange Rate Service page, fill in the fields as necessary. Hover over a field to read a short description.
4. Map the fields from the XML file to the currency exchange rates table in the source field.

5. Apply any necessary transformation rules.
6. Turn on the Enabled toggle to enable the service.

Follow the steps given below to update the currency exchange rates through a service:

1. Select the magnifying glass icon, enter Currencies, and then select the related link.
2. Select the Update Exchange Rates action.

You can preview the effect that an exchange rate adjustment has on posting before you actually post by choosing the Preview Posting action on the Exchange Rates Adjustment report request page. On the request page, you can specify what to include in the preview:

• Get a detailed posting to the general ledger by entry.
• Get a summarized posting by currency. Just pick the Adjust per entry field on the Exch. Rates Adjustment report.

For customer and vendor accounts, the batch job uses the exchange rate that was valid on the posting date specified for the batch job to adjust the currency. The batch job calculates the differences for the individual currency balances and posts the amounts to the general ledger account that is specified in the Unrealized Gains Acc. field or the Unrealized Losses Acc. field on the Currencies page. Balancing entries are automatically posted to the receivables/payables account in the general ledger.

The batch job processes all open customer ledger entries and vendor ledger entries. If there’s an exchange rate difference for an entry, the batch job creates a new detailed customer or vendor ledger entry. The new entry reflects the adjusted amount on the customer or vendor ledger entry.

Business Central assigns the dimensions from the customer or vendor ledger entries to the adjustment entries, and posts adjustments for each combination of dimension values.

For bank accounts, the batch job adjusts the currency by using the exchange rate that is valid on the posting date specified in the batch job. The batch job calculates the differences for each bank account that has a currency code and posts the amounts to the general ledger account that is specified in the Realized Gains Acc. field or the Realized Losses Acc. field on the Currencies page. Balancing entries are automatically posted to the general ledger bank accounts that are specified in the bank account posting groups. The batch job calculates one entry per currency per posting group.

The adjustment entries for the bank account’s general ledger account and the gain/loss account are assigned the bank account’s default dimensions.

If you post in another reporting currency, the batch job can create new general ledger entries for currency adjustments between the local currency and the other reporting currency. The batch job calculates the differences for each general ledger entry. It adjusts the general ledger entry depending on the contents of the Exchange Rate Adjustment field for each general ledger account.

The adjustment entries are assigned the default dimensions from the accounts they’re posted to.

Every now and then you might need to correct a mistake in a payment transaction that’s associated with adjustments to foreign currency gains and losses. You can use the Reverse transaction action on the Bank Account Ledger Entries, Customer Ledger Entries, and Vendor Ledger Entries pages to backtrack and reverse the payment transaction.

Keeping your currency exchange rates up to date in Dynamics 365 Business Central isn’t just good practice, it’s essential for accurate reporting, informed decision-making, and maintaining compliance with accounting standards. By automating or regularly updating exchange rates, businesses can avoid discrepancies, reduce manual errors, and ensure that financial transactions reflect true market conditions. With the right configuration in Business Central, staying current with exchange rates becomes a seamless part of your financial management routine.

For more tips on optimizing Dynamics 365 Business Central or to fully utilize its features, contact Rand Group today.