What is the most common problem with multiple exchange rate methodologies across your group? One abundantly clear answer is deviations in your spreadsheet. And the risk with Excel is that you might not altogether prevent it. Still, you can create a consistent procedure for managing currency translations across your group and eliminate common errors. As we all know:
Deviations in results are not something you, our management, or the board of directors are interested in seeing.
But how do you avoid deviations when talking about forever fluctuating exchange rates?
What methodologies do you use across your group?
By definition, exchange rates fluctuate, which is why most finance departments have one method they use. But if we ask you which currency translation method all your subsidiaries use, are you able to tell with 100% certainty?
As finance professionals, we do not go to the same school, have the same management demands, or learn the same way. Consequently, a point that is often very clear when we talk about excel – we all have one way of managing the spreadsheet. It is the same with the typical lack of control over the exchange rate methodologies used across your group. Furthermore, most groups have subsidiaries in various countries but not a standardized way of managing currency translations across your group. Instead, some use:
- A monthly mean
- The rate on the last day of the month
- The rate on the day you forward the numbers to the report
In a world where we are dependent on accurate numbers, we cannot use error-filled reports. And this is what creates the urgency: Lack of standardization, especially when managing multiple Excel spreadsheets, will lead to deviations and inaccuracies in your group reporting.
2-steps-approach for multiple currencies without deviations in Excel
Creating a consistent and standardized process for translating exchange rates isn’t complicated if you know how. Therefore, we have created a guide on the exact topic. If you struggle with managing currency translations in Excel for your whole group. Then you will learn efficient ways to solve deviations in your Excel reporting and ultimately achieve accurate group reporting with exchange rates. The guide outlines how to streamline working methods across your group for more efficient and precise group reporting.
DOWNLOAD OUR GUIDE HERE: Build a consistent standard for managing exchange rates in two steps
Or use automation to make it even more straightforward to translate the exchange rates.
The most simple approach to translating exchange rates is to automate repetitive tasks. Companies with an automated and standardized way across ALL subsidiaries can handle the exchange rates more efficiently, like the Danish Group Carl Hansen & Son, which you can read here.