Currency

In the forwarding management system (FMS), you can register revenues and costs in different currencies. The system handles multiple currency conversions to support various business scenarios, including invoicing in currencies that differ from the line currency and tracking amounts in document currencies (customer or vendor currencies).

This article explains how currencies work in FMS cost and revenue lines, how to manage voyage-specific exchange rates, and how invoice currencies are determined.

Overview

When you register a revenue or cost line with an amount in a foreign currency, the system converts the line amount to the local currency (LCY) according to the currency exchange rate. Each cost or revenue line can work with up to three different currencies:

Line Currency: The currency in which the line amount is specified (Currency Code field)
Invoice Currency: The currency used for invoicing (Invoice Currency Code field)
Document Currency: The currency of the customer (for revenue lines) or vendor (for cost lines) (Document Currency Code field)

The system automatically calculates conversion factors and amounts in these different currencies based on exchange rates and adjustment percentages.

Important

Do not create the local currency code both in the General Ledger Setup and in the Currencies page. This will create confusion between the blank currency and the LCY code in the currency table, and bank accounts, customers or vendors might accidentally be created, some with the blank currency and some with the LCY code.

Currency fields on cost and revenue lines

The following sections explain the currency fields available on cost and revenue lines and how they work together.

Currency Code

The Currency Code field specifies the currency in which the revenue or cost line amount is recorded. This is the base currency for the line.

When you enter a currency code on a cost or revenue line, the system:

Retrieves the exchange rate for that currency based on the posting date
Sets the Original Currency Factor to the exchange rate at the time the line is created
Sets the Currency Factor Date to the date used to determine the exchange rate
Uses a specific FMS Currency Exchange Rate if one exists for the document, voyage, or voyage call; otherwise, uses the standard Business Central exchange rate

The system converts the line amount to local currency (LCY) using the original currency factor, which is stored in the Line Amount (LCY) field.

How the currency code is determined

The currency code can be set manually or automatically:

When creating a line from a contract, the currency code comes from the contract detail line
When manually entering a line, you can specify any currency code that is set up in Business Central
The currency code can be changed as long as no invoices have been created or posted for the line

For more information about setting up currencies in Business Central, see Set up currencies.

Original Currency Factor

The Original Currency Factor field stores the exchange rate that was used when the line was first created. This factor represents the relationship between the line currency and the local currency (LCY) at the time the line was created.

This field is:

Automatically set when you enter or change the Currency Code
Not editable by users
Used as a reference point for all currency conversions on the line
Set to 1 if the currency code is blank (meaning the line is in local currency)

The original currency factor preserves the exchange rate that was valid when the transaction was originally recorded, even if exchange rates change later.

Note

When you change the posting date of a line, the system automatically recalculates the currency factors. The Original Currency Factor is updated based on the new posting date, and all related currency amounts (including Currency Factor, Document Currency Factor, and amounts in different currencies) are recalculated accordingly.

Currency Factor

The Currency Factor field is a calculated field that represents the conversion factor from the line currency to the invoice currency. This factor is automatically calculated and cannot be edited manually.

The currency factor is calculated as follows:

If the line currency equals the invoice currency, the factor is 1
If no invoice currency is specified, the factor equals the original currency factor adjusted by the currency exchange rate adjustment percentage
Otherwise, the factor is calculated by dividing the invoice currency factor by the original currency factor, then applying the currency exchange rate adjustment percentage

The formula used is:

Currency Factor = (Invoice Currency Factor / Original Currency Factor) × (1 + Currency Exchange Rate Adjustment % / 100)

The currency factor is used to calculate the Line Amount (Invoice Currency) field, which shows the line amount converted to the invoice currency.

Currency Factor Date

The Currency Factor Date field stores the date that was used to determine the currency factor for the invoice currency conversion. This date is automatically set when the currency factor is calculated and cannot be edited.

This field helps track which exchange rate date was used for the invoice currency conversion, which is important for audit purposes and for understanding how the amounts were calculated.

Currency Exchange Rate Adjustment Percentage

The Curr. Exch. Rate Adjustment % field allows you to apply a percentage adjustment to the exchange rate. This adjustment is typically used to account for:

Bank exchange rate differences compared to official rates
Margin or markup on exchange rates
Specific contractual exchange rate adjustments

This field is:

Automatically populated from condition sets when they are calculated
Not directly editable by users
Applied to both the currency factor and document currency factor calculations
Expressed as a percentage (for example, 2.5 means a 2.5% adjustment)

The adjustment percentage is applied to the exchange rate calculation as follows:

Adjusted Factor = Base Factor × (1 + Adjustment % / 100)

If the adjustment percentage is positive, it increases the conversion factor (making the foreign currency amount higher when converted). If negative, it decreases the factor.

Document Currency

The document currency represents the currency of the customer (for revenue lines) or vendor (for cost lines). This currency is automatically determined from the customer or vendor master data and cannot be changed directly on the line.

Document Currency Code

The Document Currency Code field is automatically set based on:

For revenue lines: The currency code from the customer card
For cost lines: The currency code from the vendor card

If the customer or vendor does not have a currency code specified, the document currency code remains blank, which means the document currency is the local currency.

Document Currency Factor

The Document Currency Factor field is calculated to convert amounts from the line currency to the document currency. This factor is calculated as follows:

If the line currency equals the document currency, the factor is 1
Otherwise, the factor is calculated by dividing the document currency exchange rate by the original currency factor

The document currency factor is used to calculate the Line Amount (Doc. Currency) field, which shows the line amount in the customer's or vendor's currency.

Line Amount (Doc. Currency)

The Line Amount (Doc. Currency) field shows the line amount converted to the document currency. This amount is calculated by multiplying the line amount by the document currency factor and rounding according to the document currency's rounding precision.

This field is useful for:

Showing customers or vendors amounts in their own currency
Reporting and analysis in document currency
Understanding the impact of currency fluctuations on customer or vendor relationships

How currency fields work together

The currency fields on a cost or revenue line work together to support multiple currency scenarios:

Line Creation: When you enter a currency code, the system sets the original currency factor based on the posting date
Invoice Currency Setup: When an invoice currency is specified (either manually or through condition sets), the currency factor is calculated to convert from line currency to invoice currency
Document Currency Calculation: The system automatically determines the document currency from the customer or vendor and calculates the document currency factor
Amount Updates: Whenever amounts, quantities, or currency-related fields change, all currency amounts are recalculated automatically
Posting Date Changes: When the posting date is changed, the system recalculates all currency factors based on the new posting date, ensuring that exchange rates reflect the correct date

Example: Currency conversion on a revenue line

Consider a revenue line with the following setup:

Currency Code: EUR (Euro)
Original Currency Factor: 1.10 (1 EUR = 1.10 LCY)
Invoice Currency Code: USD (US Dollar)
Invoice Currency Factor: 0.90 (1 USD = 0.90 LCY at invoice date)
Currency Exchange Rate Adjustment %: 2.5%

Calculations:

Currency Factor = (0.90 / 1.10) × (1 + 2.5 / 100) = 0.818 × 1.025 = 0.838
If Line Amount = 1000 EUR:
- Line Amount (LCY) = 1000 × 1.10 = 1100 LCY
- Line Amount (Invoice Currency) = 1000 × 0.838 = 838 USD

Voyage currency exchange rates

In the forwarding industry, it's common to use a different exchange rate, often determined for a voyage 7 days before arrival. These voyage-specific exchange rates can override the standard Business Central exchange rates.

To set up a voyage currency exchange rate

You can register voyage currency exchange rates from the following pages:

Voyage
Voyage Schedule
Voyage Call
Shipment

On one of the mentioned pages, choose the Currency Exchange Rates action
Fill in the fields as described in the following table

Field	Description
Carrier No.	Specifies the carrier for which this exchange rate applies. This allows you to manage currency exchange rates per carrier.
Apply To	Specifies whether the exchange rate applies to Costs, Revenues, or Both.
Currency Factor	Specifies the currency factor (exchange rate) for the selected currency code.
Original Exchange Rate	Determines the original exchange rate. The value is copied from the Currency Exchange Rate when you create the line.
Exchange Rate Adjustment Factor	Specifies the exchange rate adjustment factor (foreign currency to local currency). Based on this value, the system calculates the Currency Factor.

FMS-specific exchange rates

In addition to standard Business Central exchange rates, the FMS system supports document-specific, voyage-specific, and voyage call-specific exchange rates. These rates are stored in the FMS Currency Exchange Rate table and take precedence over standard exchange rates when they exist.

The system searches for FMS-specific exchange rates in the following order:

Document header exchange rates
Voyage call exchange rates
Voyage schedule exchange rates
Voyage exchange rates

If no FMS-specific exchange rate is found, the system uses the standard Business Central exchange rate for the posting date.

Invoice currency source

In freight forwarding, it's often necessary to record the line amount in one currency while issuing the invoice in another. For example, if the freight rate is in USD, the invoice might need to be issued in the customer's default currency registered on the customer card, such as EUR.

You can manage the invoice currency with the Invoice Currency Source field on the revenue line. The selected Invoice Currency Source determines the Invoice Currency field on the revenue line.

Tip

Learn more about setting up the Invoice Currency Source field with Invoice currency condition.

To manually change the invoice currency

If you need to change the invoice currency for a shipment manually, you can change the Invoice Currency Source on the revenue line. You can choose from the following options:

Line: Uses the currency on the revenue line
Customer: Uses the currency on the customer card
Local Currency: Uses the local currency as defined in General Ledger Setup

Alternatively, you can change the Invoice Currency field on the revenue line manually by leaving the Invoice Currency Source field blank.

Currency exchange rates in Business Central

The FMS system integrates with Business Central's standard currency exchange rate functionality. Exchange rates are stored in the Currency Exchange Rates page, where you can:

Enter exchange rates manually for specific dates
Set up an exchange rate service to automatically update rates
View historical exchange rates

For more information about managing currency exchange rates in Business Central, see Update currency exchange rates.

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