Many businesses, large or small, depend on international markets for supplies of goods and sales of their products and services. These fastest growing businesses in today’s world have started using accounting packages as a solution to their complex business problems. With the globalization, business has outspread all over the world; this creates demand for bookkeeping solutions with multiple currency features embedded in them. Giddh accounting software is one such package that allows multi-currency calculations and saves the transactions in various currencies for the same business located in different countries.
Let’s imagine you have some small offices around the world that are growing rapidly. You don’t have a proper accounting system to manage the financial details of all your branches, to help you grow in each country there are accounting packages which support multinational accounting one of them is giddh accounting software.
Also if you are transacting with a supplier in pounds while the rest of your business uses Indian currency. So you would like to keep track of pounds due for each bill in order to know your foreign currency requirements. This will also help you in cross checking your accounts in other currencies.
The accounting software takes into account all the environmental factors that pose a great influence in multinational accounting such as nature of the enterprise, characteristics of the local environment, academic influences, and international influences to make it accessible worldwide.
While making transactions in foreign currencies, the importer must keep track of transactions when it trades its own currency for that of the exporter to make the payment. There are three methods to translate the foreign currency mentioned below:
- Functional Currency
- Current Rate Method
- Temporal Method
You have liberty to choose which best suits to your business and can generate reports that help you to identify the impact o the company on the environment. Also as a branch or subsidiary of a foreign entity, you may need to generate reports in different currencies; this can be done using business accounting software. This will also assist you in inter-firm comparison in currencies other than base currency.
If you export goods and services from different countries, the accounting software calculates foreign taxes applicable to each transaction automatically.
Let’s find out advantages of multi-currency in accounting software:
- You can work on unlimited foreign currencies.
- You can enter transactions in many other foreign currencies.
- You can easily calculate forex gain/loss.
- You can view profit and loss statement and balance sheet in different currencies.
- You can keep track of international receivables and payables.
It is important to manage business risks, as businesses make purchases with other countries only if the future prices of the raw material are guaranteed and does not affect the foreign currencies exchange rate adversely to the business. Accounting software also helps in ascertaining such risks and plan accordingly to make better decisions. Therefore, business transacting in multiple currencies will appreciate the usability of the accounting software.
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