Using Planning Currency Conversion Feature to Manage Foreign Currency Exposure

By
June 1st, 2011


A typical challenge for any company that transacts business in a number of currencies is how to reduce the impact of foreign currency fluctuation on its bottom line. Overcoming this challenge requires maximum insight into a company’s FX needs and timing of such needs.

Gaining such insight is less of a challenge if a company is already using Oracle Hyperion Planning for its annual and quarterly budgeting/forecasting.

Such an application would obviously be a multi-currency application.

By using multi-currency web input forms to enter revenue and expense data in their native currencies, a company can get a better picture of its planned expenditure and revenue by currency.

Through the Planning applications’ dimensionality, a company is also able to see exactly where and what areas of its business activities are driving the demand and supply of foreign currencies, and thus their contribution to the company’s overall foreign currency exposure. This information would also be available by month or any other time period.

The multi-currency exposure implied in any planning scenario can then be summarized in a report/table similar to the one shown below.

Diagram

Armed with this information, a company’s treasury department can do a better job of managing its FX hedging activities.

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