BOM Costing in Multiple Currencies
ERPNext allows users to calculate the cost of a Bill of Materials (BOM) in different currencies before the BOM is submitted. This is particularly useful for businesses that purchase raw materials from international suppliers and want to evaluate manufacturing costs using the supplier’s currency instead of the company’s default currency.
The BOM cost is calculated based on the selected method for determining material rates, such as Price List, Valuation Rate, or Last Purchase Rate, and is automatically converted to the currency selected in the BOM.
Changing the BOM Currency
Users can change the Currency field in the BOM before submitting the document.
Once a currency is selected, ERPNext recalculates the material costs and total manufacturing cost using that currency, allowing users to analyze production costs from different financial perspectives.
The BOM currency can only be changed before the BOM is submitted. ERPNext automatically recalculates all material costs based on the selected currency.
Using Price List Currency
When Rate of Materials Based On is set to Price List, ERPNext fetches material prices from the selected buying Price List.
This is useful when purchasing materials from international vendors.
For example:
- A company purchases plastic raw materials from suppliers in Japan.
- The supplier provides prices in Japanese Yen (JPY).
- The company’s base currency is INR.
- A buying Price List named Import Japan stores the material prices in Yen.
When the BOM currency is changed to JPY and material rates are based on the Price List, ERPNext calculates the entire BOM cost using the prices defined in the Japanese Price List.
This enables accurate costing without manually converting currencies.
Using Valuation Rate
If Rate of Materials Based On is set to Valuation Rate, ERPNext retrieves the valuation rate stored in the Item master.
Since valuation rates are maintained in the company’s base currency, ERPNext automatically converts those values into the currency selected in the BOM.
This allows users to review manufacturing costs in different currencies while maintaining inventory valuation in the company’s default currency.
Using Last Purchase Rate
When Rate of Materials Based On is set to Last Purchase Rate, ERPNext calculates BOM costs using the most recent purchase price recorded for each raw material.
The system automatically converts those rates to the currency selected in the BOM, allowing users to compare manufacturing costs using the latest procurement prices.
Business Benefits
- Calculates BOM costs in multiple currencies.
- Supports international procurement and global suppliers.
- Uses buying Price Lists for foreign currency costing.
- Automatically converts valuation and purchase rates into the selected currency.
- Improves manufacturing cost analysis for imported materials.
- Eliminates manual currency conversion during BOM preparation.
Key Summary
BOM Costing in Multiple Currencies enables manufacturers to calculate production costs using different currencies before submitting a BOM. By leveraging Price Lists, Valuation Rates, or Last Purchase Rates, ERPNext automatically converts material costs into the selected currency, providing accurate manufacturing cost analysis for both domestic and international sourcing.
