Enterprise

6.2

Currency

As described in Chapter 4 of the General Concepts M anual, UO - SM ARTStream System Overview, some

SM ARTStream policies (Currency, for example) support the activities of many SM ARTStream

applications. In the SM ARTStream environment, this concept is referred to as “the Enterprise”. As for all policies defined at this level, the information specified in the Currency policy will act as a default to other

SM ARTStream application windows. M ost defaults can be overridden at the document entry level.

In this case, the Currency policy allows us to manage the retrieval and use of various exchange rates for transactions processed in SM ARTStream Budget, Funds Control, Ledger, Purchasing and Payables.

SM ARTStream can be set up either as a Single Currency or a M ultiple Currency system. If we had chosen “Single Currency”, all business transactions would be recorded in one currency only. Aside from purchasing goods and services from Canadian vendors, the University of Ottawa frequently deals with vendors in the United States and must pay invoices in US Dollars. For this reason, UO - SM ARTStream was setup as a “M ultiple Currency” system with two defined Currency codes:

• CAD - Canadian Dollars

• USD - US Dollars

By choosing a M ultiple Currency system at the Enterprise level, we still have the flexibility to be more restrictive at the application level (Budget, Ledger, etc..) if the use of a single currency (Canadian Dollars) is more appropriate. In practice, users will see Canadian and US Dollar transactions in the Purchasing and Accounts Payable modules; however, all transactions in Budget, General Ledger and Funds Control will be recorded in Canadian Dollars.

6.2.1 Currency Defaults

At the Enterprise level, some elements are defined and will act as defaults in other SM ARTStream

applications. These elements are indicated in figure 6.1 and described below.

Rate Type Rate Entity

Figure 6.1:

Enterprise Policy (Currency View)

Booking Currency Transaction Currency

• Rate Entity: the source for Currency exchange information for a Payable Entity. Only one Rate Entity is defined, its value is “BANK - Taux de la banque d’Amérique” (BANK - Bank of America Rate).

• Rate Type: sets the number of days for which a rate remains valid and determines which action to take when the rate expires. W e have chosen not to let this rate expire but rather to change it as required. Only one Rate Type is defined, its value is “T - Taux courant” (T - Current Rate).

• Booking Currency: the base currency in which SM ARTStream Ledger maintains its primary balances. Because the University’s books are kept in Canadian Dollars, the Booking Currency

In SM ARTStream Purchasing, the currency applied to a requisition comes from the Purchasing Site. In Site

policy, Canadian Dollars (CAD) is defined as the default currency for Site UOCA and US Dollars (USD) for Site UOUS. W hen attaching requisition lines to a purchase order, the currency comes from the vendor selected and not the Purchasing Site. If such a currency is not defined for the selected vendor, then the currency will come from the purchase entity used when preparing the purchase order. Although the

Transaction Currency may be overridden on the purchase order, there is no need to do so since all vendors are set up with a default currency.

SM ARTStream Payables uses the Transaction Currency set up for a vendor as the default currency on the invoice. If no default Transaction Currency is defined for the vendor, Payables uses the default currency from the Payable Entity (Canadian Dollars - CAD) to pay the invoice. Although the transaction currency may be overridden when paying an invoice, there is no need to do so since all vendors are set up with a default currency. For example, American vendors are set up with US Dollars (USD) as the default currency and Canadian vendors with Canadian Dollars (CAD) as their default currency.

6.2.2 Currency Conversion

In SM ARTStream Payables, when saving an invoice in a currency other than the booking currency, the currency function converts the amount of the invoice to the booking currency. Journal entries are generated by SM ARTStream Payables in the booking currency. The following example illustrates the currency conversion process that occurs when entering an invoice for a vendor whose transaction currency has been defined as US Dollars.

SM ARTStream Currency:

• searches the rate table to determine an effective date that is either equal to or less than the date on the invoice;

• determines the rate type applied to the conversion and generates the relevant information - the only rate type defined in UO - SM ARTStream is “T - Taux courant” (T - Current Rate);

• retrieves the rate and ensures that it is valid;

• checks the transaction tolerance percentages defined for the currency;

• converts the amount and returns the conversion data to SM ARTStream Payables.

6.3

Rates

W e obtain the rate used for converting US Dollars to Canadian Dollars from the Bank of America. These rates are monitored daily by Financial Services and the required adjustments are made in SM ARTStream to reflect an accurate currency conversion rate. The rate used for an invoice entered in US dollars can be seen in the

6.4

Payments