If you use multiple currencies in your NetSuite account, you need a way to track currency variances. With the NetSuite Foreign Currency Variance Mapping feature, you can easily do that. Let’s take a look at what this feature is and how you can set it up in your NetSuite account.
Overview of Foreign Currency Variance Mapping in NetSuite
First, let’s look at how this feature works. The NetSuite Foreign Currency Variance Mapping feature allows you to set up rules that determine where variances will post. You can create multiple different rules that route foreign currency variances into different accounts based on the rule they match to.
How to Set Up Foreign Currency Variance Mapping in NetSuite
To set up the Foreign Currency Variance Mapping feature, you’ll first need to enable the feature. You can turn on that feature under the Advanced Features section of the Accounting tab in Enable Features.
Create Variance Posting Accounts
Before you can create the variance rules, you’ll need to create your destination accounts for the foreign currency variances. To create these accounts navigate to Setup > Accounting > Manage G/L > Chart of Accounts > New. The accounts you create for foreign currency variances must be one of two types: Other Income or Other Expense.
Create a Foreign Currency Variance Posting Rule
Once you have destination accounts set up, you’re ready to create the foreign currency variance posting rules. To create a foreign currency variance posting rule, navigate to Setup > Accounting > Foreign Currency Variance Posting Rules > New.
On this page, you’ll provide the rule name and select the destination account for any variances that match the criteria of the rule. Then, set the parameters of the rule in the Criteria subtab. For example, you could base the criteria on a specific subsidiary. Then, any variances on transactions connected to that subsidiary will be posted to the variance account you listed for this rule under the Destination Account field.
How to Use Foreign Currency Variance Mapping in NetSuite
How complicated is it to use Foreign Currency Variance Mapping in NetSuite once you’ve set up the posting accounts and rules? Let’s take a look at your next steps.
For one thing, you’ll need to prioritize your rules if there is any chance that a single transaction could fit under two different variance rules. To prioritize your rules, navigate to Setup > Accounting > Manage G/L > Foreign Currency Variance Posting Rules. This will take you to the list of rules.
On the list of rules, select the Prioritize Rules button. You can use this priority page to adjust the priority of each of your rules. By default, rules are prioritized in the order they were created, but you can use the Move Up, Move Down, Move To Top, and Move To Bottom buttons to make necessary adjustments.
Reporting on Variance
After you set everything up, the variance rules will simply run in the background of your NetSuite account. To view reporting on variances, however, you will need to add a Variance Account column to reports. This column is not natively added to reports, even if you have everything for variances set up.
The NetSuite Foreign Currency Variance Mapping feature allows you to control where your foreign currency variances post. If you enjoyed this blog, be sure to subscribe to our newsletter below to receive each new blog directly in your inbox each week. We’ll see you there!