External euro initialization

Only external currency initialization of the euro is supported. You cannot convert transaction currencies to other currencies than euros.

External euro initialization is used to convert the selected transaction currencies of order contracts and service orders to euros. After external euro initialization, the financial transactions still to be performed for the contracts and service orders are completed in euros.

The difference between external conversion in LN and the conversion in LN ’s predecessor systems is that in LN, open purchase and sales orders are not converted; this is because in LN the complexity of the order-related data to be converted has increased significantly, and the risk of data corruption in specific situations is greater than in the preceding systems. Reconciliation of data in general, and financial and operations-management data in particular, is better controlled in LN than it was. Also, the business need for a conversion of open orders is less urgent, because in most cases, the lifetime of orders is limited. Note that, after external initialization, for the business partners that have changed their EMU currency into euro, new orders will be generated/defaulted in the new euro currency. Contracts, which typically have a longer lifetime, will be converted.

To use euros for new orders and contracts with your business partners, you can change the business partner’s default currency to euro in the same external euro initialization. If your business partners want to use euros for future orders and existing contracts, you must perform external euro initialization for those business partners.

Open invoice amounts

Legal rules and accounting principles do not permit you to change the currency or the amount of registered purchase and sales invoices. Therefore, LN does not change the amounts of open invoices in Invoicing and in the Financials database during external currency initialization.

After external currency initialization, you can use the external translation functions to handle open invoices that are in EMU currencies. See "External euro translation in Financials," later in this chapter.

Converting price books and price lists

You can use price books and price lists for multiple business partners. When you have run external euro initialization for all the business partners that use a price list or a price book, you can run external non-business partner related euro initialization to change the price-list currency and the price-book currencies to euro.

If you do not run external euro initialization for all the business partners that use a price list or a price book, you can copy the price list and the price book and change the currency of the copy.

Adapting the bank payment files

If the bank currency is an EMU currency, payments can be made in either the national currency or the euro. If you use a bank file to report payments to your bank, you must adapt the bank payment file to reporting in euros instead of EMU currencies after external euro initialization.

Performing external euro initialization

You perform euro currency initialization in the same way as described for internal currency initialization under "Currency-Initialization Process."

This chapter only describes the differences with internal currency initialization and the additional information that only applies to external euro initialization.

Prerequisites

Before you can perform external euro initialization, you must complete these actions in each company of the conversion cluster:

  1. Define the euro currency in the Currencies (tcmcs0102m000) session. The EMU Currency check box must be cleared.
  2. Ensure that the company has the euro as "Transition Currency" (from LN FP5) or "Euro Currency" (in previous versions) defined in the Companies (tcemm1170m000) session.

External conversion type

In the CI Clusters (tccri7101s000) session, you can select two types of external conversion:

  • External BP

    Converts the transaction-currency amounts and currencies that are linked to specific business partners or a range of business partners. For example:

    • Open contracts
    • Business-partner currencies and insured credit amounts

  • External Non BP

    Converts the transaction-currency amounts and currencies that are not linked to any business partners, for example, price-list currencies.

Conversion-cluster companies for external conversion

LN generates the same conversion-cluster companies for internal currency initialization and external euro initialization. You cannot change the list of conversion-cluster companies that LN generates. Therefore, external conversion is carried out for all companies of the conversion cluster.

Conversion-cluster transaction currencies

When you create a conversion cluster for external conversion, LN generates the list of conversion transaction currencies. It includes all currencies used by all the companies of the conversion cluster.

In the CI Clusters (tccri7501m000) session, from the appropriate menu, select Specify Transaction Currencies to start the CI Cluster Transaction Currencies (tccri7104m000) session. You must use this session to indicate for each currency whether it must be converted to euro.

Transaction-currency rates

In the CI Rates (tccri7100m000) session, you must define the currency exchange-rates between the EMU transaction currencies and the euro as follows:

  • The fixed rates between the EMU currencies and the euro must be used.
  • The Base Currency must be euro.
  • The Rate Factor must be 1.
  • The Express in Base Currency check box must be selected.

Conversion rules

During external conversion, these conversion rules are available to convert tables:

  • Transaction currency
  • Transaction-currency amount
  • Rate/rate factor (external)
  • DLL

For more information, refer to "Conversion Rules."