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As a Finance Specialist how you will manage different foreign currencies Bank a/c, like USD, EURO, GBP, AUD etc?

I mean to say how you will manage the buying and selling keeping in view market fluctuation and the fact that your home currency in different. How you will minimise currency loss.

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Question added by Anil Lalwani , Chief Accountant , Al Ahli Hospital
Date Posted: 2016/11/07
Murtaza Mushtaq Ali
by Murtaza Mushtaq Ali , Overall Experience in VAT (including VAT implementations) , Elahee Buksh Group, Allied Group, PWC

The foreign currency risk can be managed in some of the following manner;

1) Hedging strategies like SWAPs, Forward Covers etc

 Example:.

a) Foreign currency fluctuation risk for landed cost calculation of  of Pipeline planned orders can be hedged through Forward contracts.

b) For Customer guarantees in local currency for a specified period, can be hedged                                        using SWAP arrangements.

2) Raise invoice in foreign currency if the Local Statutory regulations allows. 

3) Based on external factors, historical trend, bank advisory, make timely conversions. 

4) For excess funds, invest in foreign bonds.

When u buy a product to your Your company invoice has to be raised for the country exported namely your country and payment can be from any currency unless specific curreny agreed upon .Hence if tho e seller has the same account funds can be transferred from that accounts.So the Financial Manager should be prudent enough to forsee the transaction and keep the balance accordingly to avoid any exchange loss.Otherwise Forward contract or swap etc can also be followed.

Majid Wangade
by Majid Wangade , Senior Accountant , KANTOUR LIMITED COMPANY ( Real Estate, Construction and Asset Management )

Firstly, i will follow the stock exhange market in detail to keep all taps on market position daily exchange rates and fluctuations. 

Secondly, i would prefer not to keep any balances in my offshore accounts apart from the budgeted value. If possible i would like to keep clean my offshore accounts to avoid currency losses.

 

I beleive instead of keeping the liquidity in bank accounts ist good to invest in short term policies.

Wilfredo Quito
by Wilfredo Quito , Accounting Manager , DDC LAND INC.

Thanks for inviting. I agree with the expert answers:

manseer muhammed ali
by manseer muhammed ali , Accountant General , Royal Lighting L.L.C & Royal Furnishing LLC

Currency risks can have various effects on a company, whether it trades domestically or internationally. Transaction and economic risks affect a company's cash flows, while transaction risk represents the future and known cash flows. Economic risk represents the future but unknown cash flows. Translation risk has no cash flow effect, although it could be transformed into transaction risk or economic risk if the company were to realize the value of its foreign currency assets or liabilities. Risk can be tricky to understand, but by breaking it up into these categories, it is easier to see how that risk affects a company's balance sheet.

 

Nazmul Islam CMA
by Nazmul Islam CMA , Manager , Robi Axiatal Ltd.

From the finance point of view I will suggest to use hedging & swaps to reduce the risk.

Soliman Abd  ALmalak Gendy
by Soliman Abd ALmalak Gendy , مدير ادارة مراقبة حسابات , الجهاز المركزى للمحاسبات

Every transaction is recorded in the default  currency of the company.

-Because transactions occurring in another country,Odoo stores both the value in the currency of the company & the value in the currency of  the transaction

-When we have a bank account in a foreign currencies, for every transaction,there are  two values

*The debit/ credit in the currency of the company

*The debit/ credit in the currency of the bank account

- Currnuncy rates are updated automatically.

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