Multi-currency accounting software records transactions in foreign currencies and supports the values needed for accounting and reporting. For a group, the setup may need to connect transaction currencies, each entity's functional currency and the group's presentation currency.
Those are different layers. A product that sends an invoice in euros has demonstrated one requirement, rather than the complete foreign currency close.
Which currencies and rates does the system retain?
Ask the vendor to show the original amount and currency, the accounting value and the rate used. Inspect the rate's source and date, along with the permissions and history for manual changes.
Then follow a payment made at a different rate. Finance should be able to explain the settlement and any exchange difference without losing the original transaction details.
For IFRS reporting, IAS 21 addresses foreign currency transactions and translation. The accounting treatment depends on the relevant facts and reporting framework, so the system needs to implement the policy finance adopts.
How are remeasurement and translation different?
Remeasurement deals with the accounting value of relevant foreign currency balances in an entity's functional currency. Group translation converts an entity's financial information into the group's presentation currency.
Test both where the business needs them. A foreign currency bank account and a foreign subsidiary create different requirements. Ask the vendor to show the rates, adjustments and reporting effect for each case.
The financial consolidation guide covers how currency handling fits into the group result. Avoid treating every exchange difference as the same type of adjustment.
Which scenarios should a buyer demonstrate?
Use a small set of representative cases:
- An invoice and payment in different periods at different exchange rates.
- A partial settlement with a remaining foreign currency balance.
- A bank or processor fee deducted before the receipt arrives.
- A credit note issued after the original invoice.
- A subsidiary whose functional currency differs from the group's presentation currency.
Inspect the source amount, posted entries and reporting result for each. Then correct a rate or date under the proper permissions and trace the change.
The payment reconciliation guide gives more detail on allocating receipts and explaining residual differences.
What should the close evidence contain?
Retain the balances, rates, calculations and review decisions supporting material currency adjustments. The team should be able to reproduce the period-end position after rates or open balances change.
Also ask how the system handles rounding and accounts with incomplete currency information. Small unexplained differences can create substantial review work when they recur across many transactions.
How does Light fit a multi-currency requirement?
Light's consolidation software includes entity and group currency handling. Its subscription management product describes invoicing in customer currencies and accounting for exchange differences when payments arrive.
Bring your actual entities, currencies and bank accounts to the demonstration. Confirm the supported process rather than relying on the number of currencies in a product list.
A good evaluation ends with a transaction the team can explain from invoice through settlement to the group report. The multi-entity accounting guide helps assess the rest of that platform decision.
