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A Compliant Solution for the Euro

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.

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A Compliant Solution for the Euro

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  1. A Compliant Solution for the Euro Your Business & the Euro

  2. Presentation Format • The Euro • EM4 • EM4 Processes

  3. The Euro • Requirements • Time-scales

  4. The Euro • What is it? • A New Currency • When will it exist? • 1st January, 1999 • Why? • Major move towards a single market

  5. Impact • Monetary amounts to be paid or accounted for • Fixed Timetable • Defined Calculation Algorithms

  6. 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)

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 • From 1st Jan. 2002, notes and coin will be introduced with all NCU currency being withdrawn by 1st July 2002(latest).

  8. The Euro • Why does the Euro require special handling? • What is different?

  9. 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

  10. 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

  11. NCU -> NCU • Triangulation • First convert to euro • Euro amount may be rounded to not less than 3 decimals • Then convert to target NCU

  12. Triangulation Euro Multiply Divide Guilder French Franc

  13. NCU -> Out Currency • First NCU to Euro using Conversion Factor • Then Euro to Out Currency using Exchange Rate (GCC)

  14. Partial Triangulation Euro Multiply Divide French Franc Sterling

  15. Out Currency -> NCU • Out Currency to Euro using Exchange Rate (GCC) • Then NCU to Euro using Conversion Factor

  16. Partial Triangulation Euro Multiply Multiply Sterling Irish Pound

  17. Other Solutions ? • Only if they achieve the same result

  18. Guiding Principle • No Compulsion • No Prohibition

  19. 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

  20. 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.

  21. 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

  22. Nice to Have! • Dual Currency Reports • Not Mandatory • Lack of Print Positions • If system reports already cater for multiple currencies, EM4 will apply.

  23. The EuroParticipating Countries

  24. The Euro - Business Impact • Dual Currency Scenario • Unusual Event • Little Experience • Specific Conversion Rules • Being Close Will Not Do

  25. Euro - Company Switchover • Base Currency Conversion • Open / Closed Items • Sub-ledgers • Business History

  26. The Transition Period Impact • Side by Side Currencies • Application Software • Fine in 2002(After Conversion) • Transition Solution

  27. Conversion Factors1/1/98

  28. EM4 Overview

  29. 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

  30. 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

  31. 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.

  32. 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.

  33. 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.

  34. 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.

  35. 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.

  36. 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.

  37. Impact on IT cont. After the conversion has completed, the maintenance of the application is retained by the IT department.

  38. EM4 - What is it? • Software Application • Similar Approach to MS4 • Joining of Business & Software Skills • Partner Committed to Beta Testing & Implementation

  39. EM4 - The Solution • Search Engine • Fields • Code • Encapsulated Code • Calculation Routine • Produces Compliant Application

  40. EM4 - The Solution • Calculator for Exceptions • Exceptions will Exist • Rules Must Be Used • Uses Same Calculation Routine

  41. EM4 - The Solution • Automated Conversion Tool • You Need to Apply the Rules • Planning & Testing Needed • Uses Same Calculation Routine

  42. The Environment is Fixed but Will there be changes?

  43. EM4 - Future Proof • Additional Currencies • Different Transition Periods • Changes during Transition

  44. 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: euro@ms400.com

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