Managing Multi-Currency Transactions in Tropic

Overview

Tropic’s Multi-Currency functionality simplifies procurement management for organizations dealing with international currencies. This feature allows you to:

• Create and manage requests and contracts in currencies other than your base currency.
• Seamlessly convert amounts into your base currency for accurate reporting and aggregation.
• Enhance financial visibility with currency codes and conversion tooltips across the platform.

This guide explains how to enable and use the Multi-Currency feature, ensuring your financial data remains accurate, consistent, and aligned with global operations.

Using Multi-Currency for Specific Transactions

If your organization mainly uses one base currency but has contracts and requests in other currencies, you can manage these transactions using the Multi-Currency feature. This allows you to handle international suppliers or partners while keeping your base currency. Use conversion tooltips for clarity when creating and managing requests and contracts in different currencies.

Creating or Editing a Contract or Request in non US Currency

Suppose you have a contract in Tropic that was initially set in USD, but you need to edit it to CAD (Canadian Dollar) due to a change in supplier terms or currency preferences.

Steps to Edit the Contract:

1. Navigate to the Contract: In Tropic, click Contracts and locate the contract you wish to edit. Click on the contract to open its details.
2. Edit Contract Details: Within the contract details, locate the currency field, which displays the current currency (USD). Click on the currency field to open the currency selection dropdown.
3. Select CAD as the Currency: From the currency selection dropdown, choose CAD as the new currency for the contract. This will update the contract to be in Canadian Dollars.
4. Save Changes: After selecting CAD as the currency, click Save

In your Contract page you can see that the Total Contract Value which used to be in USD, is now showing as $2,554.60 USD, the equivalent value in USD based on the current exchange rate. The actual value of the contract, Source Contract Value, in Canadian dollars, is now $3,500 CAD.

You can hover over the Total Contract Value amount to get a quick overview of the conversion.

To filter by Source Currency simply click Filter and select the currency of your choice

All contracts with that Source Contract Value Currency display

When creating or editing a request, you have the ability to select the currency that best fits the needs and preferences of your organization. When you click on the request, you'll see the Anticipated Spend displayed in the currency selected in the Request Details form.

Understanding Currency Conversion

Tropic applies Foreign Exchange (FX) rates for requests and contracts to a specific effective date. This means the rates will not fluctuate from day to day.

• For request, the effective date is based on the date the request is created.
• For contracts, the effective date is based on the creation date initially until the contract record is updated with the signed date. Once the signed date is populated, the effective date adjusts accordingly.

This approach ensures that amount based rules and displayed values are accurately represented throughout the application.

Switching and Setting Your Base Currency

If your organization operates primarily outside the US and prefers to manage all transactions in a local currency (e.g., GBP, EUR), you can change the base currency for better alignment with local operations and financial reporting. For options, see the Options for Changing Your Base Currency section.

To change your base currency, please contact Support to initiate the process. The process for migrating an existing customer from one currency to another requires coordination with your Tropic account team. Click here to submit a request.

Options for Changing Your Base Currency

An important consideration when changing your organization’s base currency is what to do with the existing contract records. You have three options to choose from when the base currency migration is completed:

1. Option 1: Manual Change for New Contracts and Requests
   • Changing your base currency will apply only to new contracts and requests. Historical data will remain unchanged.
   • This can be managed manually.
2. Option 2: Straight Currency Switch Using USD as Proxy
   • This option involves a straightforward switch of the base currency, using USD as the reference point.
   • Aggregates and summaries will be displayed in the new base currency, but historical values will remain in USD.
3. Option 3: Full Conversion of Currency and Values
   • This option converts both the currency and the values of existing transactions to the new base currency.
   • Contract values and aggregates will be shown in the equivalent amount of the new base currency.

Managing Aggregates in Different Currencies

All your financial summaries and aggregates will be displayed in your chosen base currency. For example, if you set your base currency to Japanese yen (JPY), all totals, balances, and transaction summaries will reflect in JPY by default.

Example 1:

• Before: $1,000 (base currency USD)
• After (JPY selected): ¥110,000 (based on current exchange rates)

If the contract or request was initially in a different currency, the source value will be shown in that currency and converted to the base currency for aggregation purposes.

Example 2:

• Source Value (USD): $1,000
• Displayed as (JPY): $1,000 (source currency) and ¥110,000 (aggregated in base currency JPY based on current exchange rates)

Impact on Existing Transactions

Existing transactions will not be altered; they will remain in their original currency and amounts. However, when you view these transactions, they will be displayed in your selected base currency. The conversion to your base currency will use the current exchange rates at the time of viewing.

Example:

• Original Transaction: $1,000 (recorded in USD)
• New Base Currency: JPY
• Current Exchange Rate: 1 USD = 110 JPY
• Displayed Amount: ¥110,000

Benefits of Multi-Currency

• Exchange Rate Stability: Using a local or regional currency can reduce the impact of exchange rate fluctuations on your financial statements and operational costs. This stability can lead to more predictable financial planning and budgeting.
• Accuracy of Financial Reporting: Multi-Currency ensures that your financial data is accurately represented, reflecting the true value of transactions in their respective currencies and reducing the risk of errors in currency conversion.
• Enhanced Financial Insights: Financial reports and analytics in the local currency provide more relevant insights for decision-making. This can lead to better strategic planning and resource allocation.
• Alignment with Local Operations: If your organization operates primarily outside the US, you may find it easier to manage your finances in the local currency. This alignment simplifies accounting, reporting, and financial analysis.
• Improved Vendor and Customer Relations: Conducting transactions in the local currency can enhance relationships with local vendors and customers. It eliminates the complexity and potential confusion associated with currency conversion in contracts and invoices.

Frequently Asked Questions (FAQ)

Q: Who do I contact to change my base currency?  A: Please reach out to our Support team to initiate the process of changing your base currency. 

Q: Can I manually adjust the rates? A: You cannot adjust them, but you can manipulate the FX on contracts by changing the contract signed date.

Q: How does this work with my NetSuite integration? A: Transactions will pull in both the actual amount (in the currency of the transaction) and the reporting amount (whatever your parent company's currency is), and the exchange rate between the two is set by NetSuite.

• Purchase orders will apply the exchange rate from NetSuite once posted to NetSuite.
• Contracts/Requests will not absorb the FX rates set in Netsuite.

Q: How complex is the process of migrating to a new base currency? A: Migrating an existing customer's base currency is complex and requires coordination with the Tropic account team. It involves careful updating of individual records and potential cleanup after migration.

Q: Will there be manual processes required for updating historical contracts? A: Yes, there may be a manual process required for updating historical contracts. Customers may need to manually update the currency of each contract on a record-by-record basis if they choose not to use the automated migration options.

Q: How are exchange rates determined? A: We use a third-party service called Fixer.io to sync daily exchange rate values between supported currencies. Historical exchange rates are available from January 1, 2009.

Q: How are zero decimal currencies displayed? A: Zero decimal currencies like Japanese Yen (JPY) and South Korean Won (KRW) are presented as integers without cents. For example, if the amount is 2311.32 JPY, it will be rounded down to 2311 JPY. If the amount is 2311.89 JPY, it will be rounded up to 2312 JPY.

Q: Will reporting within the platform be in USD or other currencies? A: Reporting or any aggregation of multiple amounts will be in the organization's base currency.

Q: What currencies are supported? A: We currently support 45 of the most common currencies, here is the list: 

Additional Resources

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