Use multiple currencies for all functions

Description

Using multiple currencies in Corporate Performance Management (CPM) software involves the ability to plan, assign, track, consolidate and analyze revenues, costs, and other financial metrics in more than one currency. This is crucial for businesses operating in multiple geographical markets as it allows for seamless financial planning and accuracy in reporting across various currencies.

Example Use Case

Scenario: An international corporation with operations in the US, Canada, and Mexico, uses CPM software for financial planning. The corporation needs to handle revenue and costs in different currencies (USD, CAD, MXN) for each operation.

Solution: CPM software with multi-currency function offers the ability to record and analyze financial data in local currencies. For example, Canadian revenues can be tracked in Canadian Dollars, Mexican costs in Mexican Pesos, while the headquarters in the US can consolidate and report in USD. This approach enables the company to maintain accuracy in financial reporting and aids in strategic financial decisions across different regions.

Considerations

By “all functions” we mean budgeting, forecasting, reporting, consolidation, close, and so on. For this requirement to count, the vendor must not lack multi-currency in any part of the application.

We point this out because many tools will limit currency to a specific location - say reporting - and not allow it as an input value at the planning level. This means that your Mexican subsidiary could not enter plan data in MXN.

Questions to Ask a Vendor

• Currency Options: How many different currencies can be accommodated within your system?
• Currency Conversions How does your system handle currency conversion for plans? What about reporting on Actuals?
• Adding Currencies: What if we need to add a currency? Does this require consulting?