How does Mamut simplify international operations?
article ID: 1005854
In order to understand how Mamut simplifies international operations, it is necessary to gain an understanding of how the Currency settings work throughout the program.
Mamut uses a Base currency that is selected when first setting up the company database. This base currency is used as the currency that all transaction details will be stated and reported in. In addition, alternative currencies can also be used in Sales and Invoicing, Purchase Ordering and Journal Entry to allow for international operations.
By selecting an alternative currency for a particular contact all sales and invoicing and purchases for that contact will be generated in that currency. Mamut will record both the currency and base currency information in the ledgers. The base currency amounts will flow through to reporting and the customer ledger.
Example: A contact that has (EUR) as its default currency will, when in sales and invoicing, show (EUR) as the default currency. This means when creating an invoice for this contact all amounts will be stated in (EUR). The printed invoice will show both the currency amount (EUR) and the base amount (GBP) for each item and the total will be in (EUR) currency.
Once this invoice has been processed and has entered the customer ledger the amount shown in the customer ledger will be the base currency (GBP) amount. However when the list of outstanding amounts for this particular contact is brought up the currency code (EUR) and currency amount (EUR) will be shown along side the base amount (GBP).
Later when the customer pays the invoice in currency a customer receipt will be entered within Mamut. Here any difference between the base (GBP) and the currency amount (EUR) caused by movement in the foreign exchange rate since the issue of the invoice and payment, will be automatically posted to the foreign exchange gain/loss account.
Mamut calculates the currency amount using FX rates that are stored in the Currency Register within the system. Within the currency ledger the rates are stated in base currency. Meaning the amounts read 1 Euro = 0.698 Pence for example. These rates need to be kept current and Mamut is able to give a reminder about this using the currency settings.
These features mean that sales and purchases in an international environment are possible. For more complicated international operations Mamut also allows the use of foreign currency in the accounting module Journal entry. This means international transactions can be recorded in Currency with all the detail of the foreign currency and automatically translated to base to assist with account preparation and analysis.
Accounts such as additional foreign bank accounts can also be added to the chart of accounts and setup so that their default setting is a foreign currency.
Example: A business that has an office or a rental property in France would need to not only buy and sell goods in Euro (EUR) but they would also need to account for the office / property in the local currency.
This is achieved in Mamut by setting up accounts within the chart of accounts that have EUR as the default currency (e.g. Euro Bank accounts, Office Equipment Asset accounts and Various Overhead accounts.) Departments can also be used here to further divide international regions.
A depreciation entry for the French office’s fixtures could be calculated using the historical Euro value of the assets and could be posted in Euro into Mamut. The main accounts in the comparable base GBP will automatically reflect this.
The depreciation journal could then be viewed in the financials. The base amount will be shown alongside the currency information.
Mamut simplifies international operations by using pre-selected currencies for international contacts and international accounts and integrating this with Sales and Invoicing, Purchase Ordering and Journal Entry. Invoices stated in the foreign currency and journals posted in the foreign currency are all reported in the base company currency for quick comparison across regions that are meaningful to management.Key words; currency, international,