Skip to Content
0

Understanding FX exposure in Procurement process

Nov 03, 2016 at 10:29 AM

78

avatar image
Former Member

Hi All,

This is a generic question with regards to FX in the context of procurement process. Any replies (both high level and specific) are much appreciated. My client wants to understand how early in the procurement process can we identify the foreign currency exposures.

As per my understanding, you can have FX exposures as and when invoices are posted in foreign currencies - which then flow into AP after the verification process. So we could identify based on the invoice due dates what are our foreign exchange liabilities.

Is there any other place early in the flow to (approximately) identify such exposures? For example, when a PO is created in foreign currency? Or for example in Inventory management where we could monitor specific items that are sourced from foreign vendors and paid for in foreign currency later on?

I understand that the question is a little vague but all I am looking for is some direction as I am not an expert in MM.

Thanks all,

Ray

10 |10000 characters needed characters left characters exceeded
* Please Login or Register to Answer, Follow or Comment.

4 Answers

Ankur Chauhan Nov 03, 2016 at 11:36 AM
0

Hi Raymond,

Please take help of your FI consultant, because foreign currency maintained by FI team, transaction code to maintained the foreign currency in back-end is OB08, here we define the exchange rate for foreign currency, and the currency which is updated during PO, that was update from Vendor master record,.

After the MM team verify the invoice than it moved to Account payable for FI team, & as per the exchange rate FI team make the payment to the vendor.

I hope it will resolve your query if I understood it right.

Thanks & regards,

Ankur Chauhan

Share
10 |10000 characters needed characters left characters exceeded
avatar image
Former Member Nov 03, 2016 at 11:49 AM
0

Hi Ankur,

Thanks for replying. I understand how the currency translation is carried out. My question is a little more deeper than that. We want to have a fairly good idea of our exposure even before it hits the FI AP module.

If I am a treasurer looking at my procurement process, how early in the process is it possible for me to get a good understanding of my FX liabilities. And where should I be looking in SAP to get the relevant data. Can I look at my purchase orders posted in foreign currency or perhaps inventory management can tell me what products ultimately result into cross border payments.

Thanks, Ray

Share
10 |10000 characters needed characters left characters exceeded
avatar image
Former Member Nov 03, 2016 at 02:44 PM
0

You can check report with FBL1N by selecting and entering your wanted currency with help of dynamic selections.

Also check report with ME81N with your wanted currency!

Share
10 |10000 characters needed characters left characters exceeded
avatar image
Former Member Nov 04, 2016 at 08:29 AM
0

Thank you for your reply Bijay.

FBL1N is Accounts Payable if I am not mistaken. We already have visibility on FX exposures in AP. What we want to do is try and capture this a little early in the process.

Any idea what can be done at the Purchase Order level to understand this exposure?

Also, I don't have access to ME81N. Can you please explain briefly the use of this transaction?

Thanks for your help.

Ray

Share
10 |10000 characters needed characters left characters exceeded