International Currencies | Overview
Every company has a base currency, which is defined during implementation. Any other currency is considered a foreign currency. The company base currency is shown on the company's profile and is not editable, but users can specify the currency they prefer to use while working with monetary amounts in Tracker.
Law firms can submit invoices in foreign currencies. However, the company can require that:
- The invoice and matter currencies match
- Firms or firm offices submit invoices in specified currencies
When a firm submits an invoice in a foreign currency, Tracker saves the invoice in the original currency of the invoice. Invoice amounts posted in a foreign currency are displayed in the reviewer’s default currency. This currency is used throughout the life of the invoice. For example, if an international invoice is submitted in Canadian dollars, it would remain as Canadian dollars all the way through the approval process to being sent to AP for payment. Once an invoice has been finally approved, the conversion rate to the company base currency is stored in the invoice record. Tracker does not actually convert the original currency of the invoice itself; the conversion is visual only in the interface to aid the review process.
Monetary amounts on an invoice or other document with a foreign currency are displayed in the user's preferred currency in black. International currency amounts are shown in orange.
Tracker obtains its exchange rates from a daily service, and they are based on inter-bank market rates. During implementation, each company's Tracker Coordinator specifies the frequency with which the company's exchange rates are updated (daily, weekly, or monthly). If you are a company system administrator, you can check or change the frequency of your company's updates on the Miscellaneous financial options page in Tracker settings (
Settings
> eBilling & Financial Setup
section > Miscellaneous Financial Options
).During the period when an invoice has been posted but has not yet been approved, Tracker converts international invoices using the most recent exchange rate. When an invoice is approved as final, the exchange rate from the invoice currency to the company base currency is preserved. The exchange rate is not updated when the invoice is sent to AP. When the AP batch is run, the exchange rate is locked for the final time. If you run a spending report involving an invoice that has already been approved, the report will accurately reflect the total approved amount in the company base currency at the time the AP batch was run.
Historical Records
Amounts are converted to the company base currency for historic records of the following:
- Invoice amounts
- Law firm unbilled amounts
- Matter monetary amounts, such as budget, exposure estimates, and settlement amounts.
When invoice history reports are generated, the exchange rate is maintained for the company base currency—not the user's preference. Therefore, if a user's currency preference is different from the company base currency, there may be inaccuracies in the conversion of historic invoice amounts to the user's currency preference.
Example
A user's preferred currency is U.S. dollars, the company base currency is euros, and an invoice is submitted in Swiss francs. An approved invoice was sent to AP on June 1, 2021, when the conversion rate from francs to dollars was 1.09 to 1. If the user views the invoice a year later, when the conversion rate has changed to 1.02 to 1, the invoice amount will appear as the amount in the current 2022 exchange rate, and not the amount as originally billed and approved.
Tracker saves the invoice using the exchange rate of the company base currency as of June 1, 2021, so the conversion of the invoice to the company base currency always remains the same. This can also pose problems for companies attempting to reconcile their spending in Tracker with the spending reported by their AP systems. For this reason, company system administrators can edit the final exchange rate of finally approved invoices and memo entry invoices.
note
The exchange rate can be edited after the invoice is finally approved.
Entering or adjusting international currency amounts
When you enter or adjust an amount in a currency other than your preferred currency, you enter the amount in the original currency. However, Tracker displays the amount in your preferred currency.
For example, if an invoice was posted in euros, but your currency preference is U.S. dollars, any adjustments to the invoice are in euros, but Tracker automatically displays the converted amount in U.S. dollars.
note
If the invoice includes tax, adjusting it might make the tax unrecoverable.
Before your company begins using the international currency feature, complete these tasks:
- All users: To ensure that currencies are converted correctly, check your preferences to confirm that the correct currency is specified.
- Matter Creators: If you have permission to create matters, set matter-specific currency preferences.
Amounts in the Matter Profile or Closing Matter Form
If an exposure estimate or other monetary amount is entered for a matter with a currency that is different from the user's preferred currency, Tracker uses the most recent exchange rate to convert the foreign currency amount to the user's currency preference.
However, once a matter is closed, the conversion rate to the company base currency is permanently locked in the matter record. When historic matter reports are generated, the original currency conversion rate is maintained.
International invoices and tax recovery
Tracker accepts invoices in the LEDES 1998, 1998BI, and LEDES XML formats. LEDES XML was created to accommodate international taxes. Taxes can be recovered tax on invoices submitted through Tracker, whether in LEDES 1998BI or other formats.
However, if you adjust an invoice that includes tax, you might not be able to recover the tax. To recover VAT from an EU member country, the electronic invoice must be unaltered. In other words, if you reduce and approve an invoice that includes tax from a firm in the EU, then your company will not be able to recover the tax charged in that invoice. Your Tracker Coordinator may have requested that Tracker configure your system to ensure that invoices to or from EU member countries are not altered and paid. If your company opts to enforce the EU VAT Compliance rules, you cannot reduce and approve non-LEDES or LEDES 1998BI invoices billed from or to an EU member state. Instead, if there is a problem with the invoice, you should dispute the invoice.
Conversion rates in closed matters
During the life of the matter, Tracker converts all monetary amounts in the matter profile and closing fields using the most recent exchange rate applicable to your company. At the moment the matter is closed, the currency exchange rate from the matter currency to the company base currency is locked and preserved. Consequently, if you happen to run a budget report for a matter that closed over a year ago, the report will accurately reflect the budget for the matter (as converted to the company base currency) last year. Preserving this historical conversion rate is important because the conversion rate from the matter currency to the company base currency may have fluctuated significantly from the time that the matter was closed.
Law Firm Budget Currency Conversion
When a law firm matter budget is entered or updated, the budget is saved in the matter currency (and the exchange rate to the company base is also stored). If the matter currency for the matter is later changed or the matter is closed, it will have no effect on the budget data or the budget currency exchange rate—the data is permanently stored in its original form.
Company budgets
Company budgets must be entered in the company base currency. The conversion of monetary amounts to a new matter currency does not apply to budgets. The exchange rate is locked at the time the budget is saved, and the exchange rate is not updated. If the matter budget is different from the company base currency, Tracker converts the budget amounts at the frequency specified in your company's currency conversion settings.
Accrual currency
Law firms can submit unbilled amounts in a currency other than the company base currency. Tracker converts the unbilled amounts to the company base currency, and the Accrual Period Ending Balance of an accrual is always stored in the company base currency.
The
accrual period ending balance
is the sum of the unbilled total plus invoices not sent to AP (pending invoices) and is always stored in the company base currency. This amount is generated and stored on the accrual period lockdown event. The unbilled total used to calculate the accrual is the unbilled amounts submitted by law firms plus other unbilled amounts. Law firms and vendors can submit unbilled amounts in currencies other than the company base currency. The currency exchange rate to the company base currency is not locked down until the accrual period lockdown event. If a company user views an unbilled amount in a foreign currency before the accrual period lockdown event, the current exchange rate is used.
Tracker saves unbilled amounts in the currency in which they were submitted. The firm's invoices are also saved in the native currency, so the company can track spending against the unbilled amounts in the same currency in which they were reported.
On the accrual period lockdown event, the amount of any pending invoices or approved invoices that have not been sent to AP are totaled as stored in the accrual profile record in the company base currency.
Unbilled Amounts
There is no relationship between the unbilled amounts currency and the matter currency. When a firm or vendor submits unbilled amounts, they can specify the currency of the unbilled amounts.
During the period when an unbilled amount has been entered but the accrual has not been generated, Tracker converts any foreign currency unbilled amounts to the company base currency using the most recent exchange rate applicable to your company.
On the accrual period lockdown event, the exchange rate for the unbilled amount to the company base currency is locked and preserved. Consequently, if you run an unbilled amounts report for any month in the past, the report will accurately reflect the total unbilled amount at the time the accrual was generated.