In Part 1 we saw how document values (commitments, expenditures, etc) can be grouped by currency in a simple FOREX report. We will now look at the possibility of reporting data based on the budget currency which may be held in a variety of currencies. Furthermore, each of the budgeted amounts may also be spent in a variety of currencies depending on, for example, the location of the supplier.
The multi-currency functionality of KCM 2.8 allows a project manager to configure the system to capture and report budget values in their native currency. The database must be configured with this in mind from the start.
The first section below will deal with the database configuration. The second section describes one possible configuration of a multi-currency cost report grouped on the budget currencies.
Initial Configuration of the KCM Database
For each named enterprise project held in the database, create a KCM sub-project to hold budget items in each currency. A standard project / budget Item Input screen for project Bear Island is shown:
Three KCM projects have been created in the database; one for each budget item currency. In this example, project Bear Island has budget funds held in AUD, GBP, and USD. Note that each sub-project is given the same project name – Bear Island. Repeat this process for the other projects in the database.
Group the screen level by project name. This allows the currency sub projects to be grouped under the correct project, which can be seen by drilling down into the layout:
As the budget items in each of the sub-projects will be in a different currency it is helpful to suffix the normal budget item code with a letter or symbol to identify the currency of budget. The example below shows how the project code can be used to identify the budget currency.
This configuration relies on every enterprise project being composed of a number of sub-projects in KCM, each with a different currency. Creating a structure with a project level at the top allows all the budget items of the sub projects to be appropriately pulled together for currency grouping against the enterprise project in reports. The alternative is to have a single structure for each enterprise project.
1. Cost Report at Budget Level
The following example demonstrates how to create a cost report grouped by the project currency so that budget item values appear in their natural currency. Other report values will also be converted to the budget currency.
A standard cost report template is used with the exchange rate mechanism and target currencies configured as follows:
- Budget Item Value(s) – there will be no currency conversion, as we want to see the natural currency of the budget item. The target currency must therefore be set to project.
- Document Values – these will be converted to the project currency using the document rate of exchange / rate of the day. Note that budget changes will normally be captured in the same currency as the budget value so no conversion will actually take place.
- Functions – Function values will also be displayed in the budget item currency. The conversion mechanism used on each function term is chosen in the function definition as usual.
2. Cost Report by Currency
If the previous report is re-run without the budget item level selected in the report criteria screen then the report will give a breakdown of budget and costs by currency only on a per project basis.
It is, however, often useful to consolidate the different currency groups back to the overall currency of control at one or more summary levels on a report. The consolidation to USD is show at project level in the example below.
This concludes this two part series on multi-currency reporting. These examples have demonstrated how to create basic multi-currency cost reports in KCM which can then be configured to match your business requirements. Kildrummy’s trained consultancy team would be delighted to assist you in this process.