This article is relevant if you are planning to activate NetSuite multi-currency.

Background

A client recently asked for some guidance on the concerns to address for activation.  The Oracle NetSuite ERP system offers native multi-currency support. Despite what some believe, you do not need to have the One World (multiple-subsidiary) feature active to implement multiple currencies.

Activating multiple currencies opens up several considerations that should be contemplated.

Note some know that our firm offers leadership with cryptocurrency. Please see my 2022 article, Automatically Update NetSuite for Any CryptoCurrency Price, to learn how we leverage NetSuite multi-currency features, which allow us to capture crypto pricing in NetSuite.

NetSuite Multi-Currency Fundamentals

Before discussing the concerns, it makes sense to understand how NetSuite tracks multiple currency transactions in the platform.

1. Base Currency: even if you are not using NetSuite One World, all transactions are relative to a designated base currency.  There is a currency designator in the NetSuite Setup, Company Information page.  The subsidiary page setups in a One World configuration define the base currency.
2. Transaction Exchange Rate: all posting transactions are designated with a currency and a currency price. For transactions that are in the base currency, the price is one (1). In a transaction saved search, you can lookup and output the {currency} and {exchangerate} fields to observe the ledger system.
3. Transaction Amount: the transaction amount column is derived by multiplying NetSuite’s Amount Foreign Currency {fxamount} with Exchange Rate {exchangerate}.

Click the image to see an example of a saved search transaction ledger with both base and foreign currency.

Considerations for Activating NetSuite Foreign Currency Feature

Before transacting in multi-currency in NetSuite, the following should be considered:

Sandbox and Training

Multiple currencies should be activated in a sandbox to help understand and plan for the impacts. Furthermore, consider how the end user community will be trained in day-to-day transaction operations once the impacts are understood.

Activating Multiple Currencies

To activate NetSuite foreign currency, navigate to Setup, Company, Enable Features and scroll to the International section of the Company tab. NetSuite offers a current feature to download night exchange rates. As of this writing, NetSuite offers, without any extra cost, currency exchange rates from Xignite and HSBC.

Foreign Currency Impacts

With foreign currency activated, the following areas should be contemplated in your setup.

1. Bank Accounts: if you have a bank account that only accepts a foreign currency, you should create a new general ledger account and mark that account with the respective foreign currency. This will limit bank transactions to only work in the designated currency. If you designate a bank account to be in the base currency, you can accept both base currency and any other foreign currency active in the system.
2. Customers/Vendors: The existing entities you transact within a foreign currency will need to be updated to include the foreign currency in the currency list. You can update the primary currency but cannot remove a currency from the currency list after creating transactions under that entity. If the only currency you will transact with is a foreign currency, you may need to create a new entity record to designate the foreign currency as primary. Note you will need to enable the multi-currency vendor/customer feature in Setup to expose the currency sublist.  Click the image to see the sublist.
3. Item Pricing: NetSuite allows you to price items in foreign currency. If you do not specifically set the price of items in foreign currency, when you transact in a foreign currency, NetSuite will take the base price times the transaction exchange rate to derive the foreign currency price. For many implementations, this automatic foreign currency item price is not desired — yet it offers a flexible model.
4. Customer Facing Documents: NetSuite’s PDFs and Emails attempt to handle foreign currency situations. However, challenges in currency symbols and formatting are often encountered. Verify all your documents. See my 2016 article, Master Advanced PDF CRE Templates: Formatting a Number with Proper Comma and Decimal Placement.

Additional Foreign Currency Impacts

While dealing with foreign currency, other impacts may be less urgent but should be contemplated:

1. Forms/Reporting: When transacting in foreign currency, consider the reports that need to be created, i.e., AR Aging, AR Aging Detail, etc. In addition, transaction forms may need to be updated to reveal the exchange rate to improve visibility.
2. Bank Reconciliation: The bank reconciliation practices will likely need to be reviewed depending on how the bank supplies information.
3. Realized Gains/Losses: NetSuite will automatically calculate realized gains and losses in accounts payable and account receivable transactions due to the timing delays from when the transaction was recorded and paid.  Consider the GL impact routing and impact on your reporting.
4. Unrealized Gains/Losses: in end-of-period close procedures, NetSuite offers a re-valuation process to target appropriate accounts (primarily cash and current asset accounts). Depending on your accounting policy (work with your auditors), NetSuite will generate reversing revaluation journal entries which will “mark to market” accounts for financial statement presentation.

Reference NetSuite Foreign Currency Related Articles

Once you are in the foreign currency game, you may encounter several situations. I have written many articles related to this topic that likely will be meaningful to you:

• 2013: NetSuite Foreign Currency Transaction Application Considerations
• 2013: Step by Step: Accounting for Bitcoin as Foreign Currency
• 2016: How To: Multiple Foreign Currency Cash Receipt Settlement
• 2017: Best Practice: How to Pay a NetSuite Vendor Bill with Foreign Currency
• 2017: Maintain NetSuite Foreign Currency Item Purchase Price Lists
• 2017: How To: Transfer Foreign Currency Between NetSuite Subsidiaries
• 2017: Learn How To Accept Different Foreign Currency in NetSuite Cash Receipt Operations
• 2017: Contrasting Bitcoin as an Asset versus a Foreign Currency in the NetSuite Accounting System
• 2018: How To Cross NetSuite Foreign Currency Boundaries with the Account Clearing Model
• 2018: NetSuite Best Practice: Receive Local Currency for Foreign Currency Invoices
• 2019: Learn How To Jump NetSuite Foreign Currency Transaction Boundaries
• 2019: Solve NetSuite Foreign Currency Cash Operations with the Prolecto Account Clearing Transaction Bundle

NetSuite Accounting and Platform Leadership

I would like to thank Jenn M., a professional in our organization, for inspiring me to write this article, as her accounting background and NetSuite product leadership helped our client prepare for foreign currency activation.

If you found this article relevant, feel free to sign up for notifications to new articles as I post them. If you would like to work with highly competent NetSuite professionals, let’s have a conversation.

Marty Zigman

Holding all three official certifications, Marty is regarded as the top NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

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