Overview
SoftLedger allows users to create custom currencies to be used as a unit of measure in journal entries. This feature is particularly useful for businesses dealing with unique or non-standard currencies, such as digital assets or specialized financial instruments. This article will guide you through the process of creating a custom currency and highlight key use cases and important considerations.
Example use case video:
How to Create a Custom Currency
To create a custom currency in SoftLedger, follow these steps:
Navigate to the Settings module in the left-hand menu.
Select the Currency tab.
Click the + New button to open the "Add Custom Currency" form.
Fill in the required fields:
Name: Enter the name of the currency (e.g., "Gold Ounce").
Code: Provide a unique code for the currency (e.g., "AU").
Symbol: Specify the symbol for the currency (e.g., "Au").
Fraction: Set the level of precision (default is 2 decimal places, which is required to be used as a currency within SoftLedger).
Click Submit to save the custom currency.
Once created, the custom currency will be available for selection in journal entries.
Using a Custom Currency in Journal Entries
After creating a custom currency, you can use it in journal entries:
Open or create a new journal entry by navigating to the Journals page.
In the journal entry form, locate the Currency dropdown menu.
Select your custom currency (e.g., "AU" for Gold Ounce).
Input a custom foreign exchange (FOREX) rate for the currency pair (e.g., AU to USD) in the Custom FOREX Rates section.
Complete the journal entry details and save or post the entry.
Use Cases for Custom Currencies
Custom currencies in SoftLedger can support a variety of scenarios, including:
Tracking Precious Metals or Commodities: Use a custom currency to record transactions involving physical assets like gold, silver, or other commodities (e.g., "Gold Ounce" with code "AU").
Managing Loyalty Points or Rewards Programs: Businesses can create a custom currency to represent loyalty points or internal credits used for customer rewards.
Facilitating Intercompany Transactions with Unique Units: For companies with internal units of measure (e.g., a parent company using a custom unit for intercompany billing), a custom currency can streamline these transactions.
Creating Digital Assets as a Coin: You can create a stablecoin-like currency (e.g., a digital asset similar to USDT) to be used in modules outside of the Crypto module, allowing for seamless integration of digital assets in financial workflows.
Warning: using a Custom Currency for a Digital Asset will not have any tie to the equivalent Coin within the Crypto Module automatically. Consider this usecase and inquire with your SoftLedger team for more details.
Important Considerations and Warnings
When using custom currencies in SoftLedger, keep the following in mind:
Currency Conversion Requirement: A custom currency will always require a conversion to the reporting functional currency of the Location included in the transaction. You will need to input a custom FOREX rate during the transaction.
Functional Reporting Currency Limitation: A custom currency cannot be set as the functional reporting currency for a Location.
Bulk Upload Restriction: Custom currencies cannot be used in bulk upload templates, such as bulk uploading journals via an Excel template.
Journal Entry Reversals: When reversing a journal entry that uses a custom currency, you will need to manually input the desired custom currency rate for the reversal.
Conclusion
Creating a custom currency in SoftLedger provides flexibility for businesses with unique financial needs. By following the steps outlined above, you can set up and use custom currencies in your journal entries while being mindful of the associated limitations.
For additional support, please contact the SoftLedger support team.