Sage Line 50 (Windows)

Although Sage Line 50 is not a multi-currency product, and is therefore unaffected by the EU legislation governing currency conversion, we are adding features to help users who will be dealing with the euro from its introduction on 01/01/1999.

Euro-functionality will be phased into this product. The euro-enabled version (v5), released in October 1998, includes a euro calculator which allows users the ability to convert values between their base currency (e.g. pounds sterling) and the euro, or any denomination of the euro. This feature allows users to:

print euro totals on a sales invoice which has been entered in the base currency (e.g. Pounds sterling).
receive a euro payment, or euro denomination payment, from a customer and convert this to the base currency before allocating against the relevant invoice(s).

All of these conversion processes are based on the rules governing the storage of exchange rates, and the so-called triangulation process.

During the transition period, and as the euro matures as a trading currency, we will offer additional euro functionality within this product, in line with customer needs.

Euro Scenarios for Sage Line 50

Remember - the euro issue is a commercial issue. Technological and accounting issues are secondary. There are strong commercial benefits to UK companies in being ready for the euro. You need to think through the costs and benefits carefully and make a start on your preparations. Use the following scenarios to help you work through the practical issues.

1. I don't have any customers or suppliers who are EMU members - do I have to change anything?

It depends on whether these non-EMU member customers and suppliers have decided to deal in the euro. Some UK-based companies have stated publicly that they will start to use the euro for invoices and payments. Examples of such companies include Philips, IBM, Siemens and Rover Group. You need to check with your customers and suppliers, even if they aren't EMU members, to find out whether they will be requiring you to invoice or pay in euro. If not, then you don't have to change anything.

2. How do I know if the introduction of the euro will affect my business?

If your business is based in Ireland you must be ready to comply with the euro legislation by 1 January 1999, regardless of whether your customers and suppliers belong to EMU member or non-member states.

If your business is UK-based, you need to determine whether your customers and suppliers will expect you to trade in euro. Some UK-based businesses have announced that they will start to trade in euro even before the UK joins the EMU. Contact all of your customers and suppliers as soon as possible, and assess whether they have specific requirements regarding the euro.

3. Is there anything I need to do now to prepare for EMU?

Yes - there are several things you need to do:

Find out which of your customers or suppliers intend to trade in the euro
Find out how this will affect your business relationship with them
Establish if euro values are required on any documents you send to them

You should also think about what new business opportunities the introduction of the euro will create, and what threats may arise from elsewhere in europe.

4. My supplier in France is insisting that I pay him in euro instead of sterling - is there a legal requirement that forces me to do this?

Strictly speaking, no, you are not required to pay in euro right now. A principle of "no compulsion, no prohibition" applies during the transition period of 1 January, 1999 to 30 June, 2002. Banks are required to carry out conversions to resolve any such conflicts, though they may decide to charge for this service. However, you need to decide whether it may just be good business practice to accommodate your suppliers and customers with their euro requirements. Line 50 v5 addresses this need by supplying a euro calculator which calculates the euro value of any payments for you.

5. How will I deal with an invoice received in euro from my supplier?

Use the euro calculator included in Sage Line 50 v5. When you record the invoice onto your system, enter the euro amount, pop up the calculator by pressing F5, and the calculator will convert this to sterling for you. This value will be stored in the invoice data file and can then be displayed on the invoice itself.

6. I have a supplier in France - how will I deal with an invoice received in French francs from 1 January 1999?

This depends on whether your company maintains its accounts in a EMU member currency or non-member currency:

Companies trading in EMU-member currencies, such as in Ireland, conducting business with other companies also trading in another EMU-member currency, such as France, must 'triangulate'. This means converting the francs to euro and then the euro to Irish pounds. Sage Line 50 v5 incorporates a euro calculator which does the 'triangulation' for you. When you record the invoice onto your system, you can enter the French franc amount and the calculator will convert this value via the euro to Irish pounds.
Where non-EMU member currencies are involved, such as in the UK, businesses can choose whether to triangulate (using the Sage Line 50 v5 euro calculator) or to manually convert directly to sterling. Major UK banks will post daily exchange rates for sterling, euro and other national currencies.

7. One of my French suppl iers wants payment in euro - how will I deal with this?

Use the Line 50 v5 euro calculator to convert any value to its equivalent in euro. Once you have calculated the euro value, you should then make arrangements with your bank to pay your supplier in euro.

8. My supplier wants me to continue paying him in French Francs from 1 January 1999 - how will I deal with this?

This depends on whether your company maintains its accounts in a EMU-member currency or non-member currency:

Companies trading in EMU-member currencies, such as in Ireland, conducting business with other companies also trading in another EMU-member currency, such as France, must 'triangulate'. This means converting the Irish pounds to euro and then the euro to francs. Sage Line 50 v5 incorporates a euro calculator which does the 'triangulation' for you. When you record the invoice onto your system, you can enter the Irish pound amount and the calculator will convert this value via the euro to French francs.
Where non-EMU member currencies are involved, such as in the UK, businesses can choose whether to triangulate (using the Sage Line 50 v5 euro calculator) or to manually convert directly to sterling. Major UK banks will post daily exchange rates for sterling, euro and other national currencies.

9. My customer in Germany wants his invoices to show a euro total from 1 January 1999 - how will I deal with this?

Line 50 v5 invoices will include a field for displaying the euro total as well as the base currency total.

10. Do I need to open a euro bank account?

No, though you may choose to do so. The major UK high street banks have stated that euro banking facilities will be available by 1 January, 1999. Under the principle of "no compulsion, no prohibition" during the transition period of 1 January, 1999 to 30 June, 2002, they are required to conduct exchange rate conversions, though they may decide to charge for this service.

11. Will I need to produce a VAT Return in euro?

In the UK, there is no legal requirement to produce VAT Returns in euro, though you may choose to do so. In Ireland, companies can submit statutory reports to Revenue in either euros or Irish pounds during the transition period (1 January, 1999 to 30 June, 2002). In the UK you can submit statutory reports in euro from 01/01/1999.

12. Will I need to produce a Profit and Loss account and a Balance Sheet in euro from 1 January 1999?

There is no legal requirement to produce management reports in euro. However, you need to determine whether your customers and suppliers will expect you to be ready for the euro. If your customers or suppliers are in EMU member states, they might require reporting in euro. Similarly, even if your customers or suppliers are inside the UK, they may be subsidiaries of parent companies who reside in a EMU member state, and require reporting in euro. Contact all of your customers and suppliers as soon as possible, and assess whether they have specific requirements regarding the euro.