A Compliant Solution for the Euro

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[email protected] om www.ms400.com A Compliant Solution for the Euro Your Business & the Euro

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A Compliant Solution for the Euro. Your Business & the Euro. Presentation Format. The Euro EM4 EM4 Processes. The Euro. Requirements Time-scales. The Euro. What is it? A New Currency When will it exist? 1st January, 1999 Why? Major move towards a single market. Impact. - PowerPoint PPT Presentation

Transcript of A Compliant Solution for the Euro

Page 1: A Compliant Solution for  the Euro

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A Compliant Solution for the Euro

Your Business & the Euro

Page 2: A Compliant Solution for  the Euro

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Presentation Format

• The Euro

• EM4

• EM4 Processes

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The Euro

• Requirements

• Time-scales

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The Euro

• What is it?– A New Currency

• When will it exist?– 1st January, 1999

• Why?– Major move towards a single market

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Impact

• Monetary amounts to be paid or accounted for

• Fixed Timetable

• Defined Calculation Algorithms

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The Euro

• Effective start of economic and monetary union.– Begins 1st January, 1999– Euro becomes a currency in its own right– NCU’s replaced by the Euro– Fixed Conversion Factors

• Ref.. Articles 2 & 3 of Reg.. 109L(4)

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The Euro

• After 31st Dec. 2001, amounts still expressed in NCU shall be deemed to be expressed in Euros converted at the official rates.

• From 1st Jan. 2002, notes and coin will be introduced with all NCU currency being withdrawn by 1st July 2002(latest).

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The Euro

• Why does the Euro require special handling?

• What is different?

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Conversion Factor:-• Shall be adopted as one euro expressed in the

terms of a NCU.

• Shall be adopted with 6 significant digits.

• Shall not be rounded or truncated

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Conversion Factor:-

• Shall be used for conversions either way between the euro and the NCU

• Inverse rates derived from the conversion rates shall not be used

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NCU -> NCU

• Triangulation– First convert to euro– Euro amount may be rounded to not less than 3

decimals– Then convert to target NCU

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French Franc

Euro

Guilder

Triangulation

Divide

Multiply

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NCU -> Out Currency

• First NCU to Euro using Conversion Factor

• Then Euro to Out Currency using Exchange Rate (GCC)

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French Franc

Euro

Sterling

Partial Triangulation

Divide

Multiply

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Out Currency -> NCU

• Out Currency to Euro using Exchange Rate (GCC)

• Then NCU to Euro using Conversion Factor

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Sterling

Euro

Irish Pound

Partial Triangulation

Multi

ply

Multiply

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Other Solutions ?

• Only if they achieve the same result

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Guiding Principle

• No Compulsion

• No Prohibition

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Legally

• Contracts which specify the use of a currency should be completed in that currency

• I.e. Order in FRF, Invoice in FRF, expect payment in FRF

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Commercially

• Customer owes 50,000 DEM, previously invoiced in DEM.

• Offers to pay in Euros

• Do you say ‘No Thanks, I invoiced you in DEM’ – or

• Take the money and lodge it.

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Nice to Have!

• Dual Currency Invoices– Not Mandatory– Dual Pricing mainly aimed at Consumers

• Dual Currency Screen Display– Not Mandatory– Most Screens do not have room

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Nice to Have!

• Dual Currency Reports– Not Mandatory– Lack of Print Positions– If system reports already cater for multiple

currencies, EM4 will apply.

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Germany Italy Ireland

Belgium Spain

Luxembourg Portugal Finland

Netherlands France Austria

The EuroParticipating Countries

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The Euro - Business Impact

• Dual Currency Scenario– Unusual Event– Little Experience

• Specific Conversion Rules– Being Close Will Not Do

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Euro - Company Switchover

• Base Currency Conversion

– Open / Closed Items

– Sub-ledgers

– Business History

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The Transition Period Impact

• Side by Side Currencies

• Application Software

– Fine in 2002(After Conversion)

• Transition Solution

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DEM 1.97632 PTE 202.137

BEF 40.7675 FRF 6.61214

LUF 40.7675 IEP 0.771961

NLG 2.22742 FIM 5.98726

ITL 1942.03 ATS 13.9020

ESP 167.388

Conversion Factors1/1/98

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EM4 Overview

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Who Are We ?Founded: June 1996

Manus Bray and Bill Chisholm20+ years of AS/400 ConsultancyExtensive Experience of SystemsImplementation and Development

Company Mission :

To Become a Market Leader in the Development of First Class End-User Products to Support Existing and Future AS/400 Environments

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Millennium Solutions Reference Sites

• Waterford Crystal Ltd Ireland

• Ciba Speciality Chemicals Worldwide

• ITT USA

• Leo Laboratories Europe

• Sara Lee / Douwe Egberts Worldwide

• CIC Video Europe

• Unichem PLC UK

• Johnson & Johnson Worldwide

• Rhone Poulenc Rorer Worldwide

• BioMérieux Japan

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History Of EM4

• Ciba Specialty Chemicals & Millennium relationship out of MS4– Multiple Installations

• Ciba was looking for a solution– Generic BPCS Solution

• Millennium & Ciba agreed an approach.

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Impact on Finance Dept.

Between 1st January 1999 - 31st December 2001, businesses with multiple companies within EU member states will need to change their base and/or global currency to the Euro.

Existing transactions will differ from one company to another as they are relative to the time at which the transactions were

processed.

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Impact on Finance cont.All in-line data will be converted to the

equivalent Euro amount

=> historical data such as Sales History and Order History will remain relative

=> their graphical representations will remain constant.

This ensures that investors and shareholders do not notice a rise/fall in share value or company performance over that period of time.

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Impact on Finance

The Finance department must be able to ensure that the company's turnover is not affected, although the annual turnover and profit is now illustrated in Euros.

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Impact on IT

It is ultimately the IT department's responsibility to ensure that

• the project runs smoothly, • meets the deadlines assigned and • remains within budget.

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Impact on IT cont.The application structure will determine

the level of IT involvement required. For complex applications where calculated

values and field relationships need to be defined, there will be a requirement for

more IT involvement than in an application where all financial fields are independent.

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Impact on IT cont.

After the conversion has completed, the maintenance of the application

is retained by the IT department.

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EM4 - What is it?• Software Application

• Similar Approach to MS4

• Joining of Business & Software Skills

• Partner Committed to Beta Testing &

Implementation

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EM4 - The Solution

• Search Engine• Fields

• Code

• Encapsulated Code

• Calculation Routine

• Produces Compliant Application

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EM4 - The Solution

• Calculator for Exceptions

– Exceptions will Exist

– Rules Must Be Used

– Uses Same Calculation Routine

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EM4 - The Solution

• Automated Conversion Tool

– You Need to Apply the Rules

– Planning & Testing Needed

– Uses Same Calculation Routine

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The Environment is Fixed but

Will there be changes?

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EM4 - Future Proof

• Additional Currencies

• Different Transition Periods

• Changes during Transition

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EM4 Technical Information

For technical information regarding EM4, please download our technical presentation from the website www.ms400.com

or contact us by

phone: +353 1 403 5400

email: [email protected]