My base currency is very volatile due to high inflation and so I have a price list in the base currency and another in USD. How do I automate or easily change base currency price list according to USD price list so that when doing manufacturing, item valuation is up to date.
Same as Venezuela,
Look at my way to handle this.
Your price lists must be in USD. Every day you will provide the currency exchange rate, so all prices will be calculated according to your doc post date.
In your Sales Order, you may choose your USD Price List and ERPNext will calculate it automatically for you.
If you have any other question, let me know,
An alternative could be to create a report BOM Cost Report that will calculate the cost of the Item based on the Price List in USD and a currency conversion ratio.
In inflationary environments I think it is best to quote in USD and agree with the customer that the exchange rate ruling on the date of delivery will be applicable. I understand one may not have the leverage with clients to do this. The other alternative is to buy the raw material on the date the order is confirmed and use that currency rate to bill your client.
Apologies to sound bookish or preachy, but if you can build a pipeline/funnel and attribute probability factors to your deals and then using the BOM to break your deals down to raw materials, then focusing on the common raw materials and stocking the quantities indicated by this model may actually help you garner a competitive advantage in the marketplace. Like you’ve bought the raw material when it was 10 Local Currency to 1 USD and by the time the deal fructifies, let’s say it is 11 to 1 USD, so at least for the common raw material (say that’s 40% of the mix), you are ahead of the curve.
Of course, buying the wrong mix of raw material can have disastrous consequences, which is the reason I said just focus on the common raw material so that even if Deal A doesn’t fructify, you can use the common raw material for Deal A in Deal B and still come out ahead.
I think this is how ERPNext (or any ERP) needs to be used - to gain competitive advantage in the market place, so I am delighted to work with you guys to build something that works for you. You guys need to come with a budget in USD, of course. :). Sorry for the plug, but you guys are welcome to build it yourself or use anybody else to build it for you. But build this buying model is something you absolutely should.
Hope this helps.
This is great and I’ve started working this way. I still, however would like a more accurate stock balance report as this is based on fluctuating base currency. I still looking for how to make sure that Item valuation is based on the USD price list.
Well, If you want/need to keep your Stock Valuation according to its USD value but in your local currency, you may want to run a Stock Reconciliation everytime you need, this could be done by creating some fields to handle acquisition costs in USD and just convert it to current exchange rate.
Actually, if you follow IAS (International Accounting Standards) this is not a allowed procedure, unless you want to reduce your stock cost (for example, expired or damaged stock), but not to increase them due to currency exchange fluctuations.
Unfortunately, in hyperinflation economies is extremely hard to guide you by your Financial Statements as you follow your local regulations, probably you may need to create your own reports to take decisions, instead of your financial statements.