Foreign exchange (FX) impact – Principles, calculations, and reading in Fincome

Conversion at the issue date: each line (invoice or credit note) is converted into your reporting currency at the ECB rate of the issue day.

Monthly vs annual:

• Monthly subscription → a new rate applies at each cycle → the MRR varies with the foreign exchange market.
• Annual subscription → a single rate over the whole period → the MRR remains stable from one month to the next.

Operational reading: in the MRR/ARR Movements view, an FX effect isolates the purely currency-related impact of the monthly variation (separate from organic business variations).

Exports: the fx_rate_applied column documents the rate used line by line.

Scope: where FX comes into play in Fincome

Covered by the FX conversion:

• MRR / ARR: Fincome recognizes MRR/ARR from the amounts already converted at the issue date (invoices and credit notes).
• MRR/ARR movements: the monthly variation is broken down into Business impact (New / Expansion / Contraction / Churn) and FX effect (pure currency effect).
• Exports: the line-level detail including the fx_rate_applied for internal audit and reconciliation can be provided on request.
• The original amounts (in the billing currency) are not modified: the conversion is calculated and stored separately for reporting.

Customer context: multi-currency management and FX effect isolation are part of the functional scope deployed with our mid-market/enterprise customers (e.g. multi-entity and multi-currency environments, cases covered in our business cases).

Rate source and application rule

→ Source: Fincome retrieves the European Central Bank's EUR/XXX fixing daily (published ~4 p.m. CET).

→ Moment of application: when an invoice or credit note is synced, the original amount is converted at the issue-day rate and stored.

→ Immediate consequence:

• Monthly: at each cycle, the subscription "takes" the current month's rate.
• Annual: the subscription "stays" at the rate of the annual invoice's issue date.

Numerical example

Assumption:

• 2 subscriptions denominated in USD: $100 monthly + $100 annual
• Reporting currency: EUR
• EUR/USD end of Jan 24: 1.07
• EUR/USD end of March 24: 1.15

Impact in Fincome:

→ In euros, the MRR curve drops by €6.50, even though nothing changed on the customer side: it is 100% FX.

Simplified formula of the FX effect (EUR/USD) Let rₘ = EUR/USD rate of month m, then for a constant MRR of $100: FXₘ (€) = 100 × (1/rₘ - 1/r₍ₘ₋₁₎)

Example: Jan → Feb 2024 if r_jan = 1.07 and r_feb = 1.12 100 × (1/1.12 – 1/1.07) ≈ 100 × (0.8929 – 0.9346) = – €4.17

Reading: when the EUR appreciates (EUR/USD ↑), $1 is worth fewer €, so the MRR in € decreases (negative effect).

Good board habit: to present organic performance, present the ARR bridge cleaned of FX impacts.

Reading the MRR/ARR Movements view

→ For each frequency (monthly, quarterly, annual), Fincome calculates:

• Business impact (New / Expansion / Contraction / Churn): the business-related variation (price, quantities, upgrades/downgrades), already converted at the issue-day rate of the invoices concerned.
• FX effect: the purely currency-related variation between the start and the end of the period, at constant MRR in the original currency.

→ Quick diagnosis: if Business impact = 0 and ΔMRR_total ≠ 0, the variation comes exclusively from FX.

Points of attention

• The oscillation is not "an error": a monthly MRR in a foreign currency mechanically moves in the reporting currency, even without any commercial action.
• Annual ≠ Monthly: if you pre-bill annually, the MRR recognized in the reporting currency remains stable (a single conversion rate).
• Credit notes: a credit note issued later is converted at the credit note's issue-day rate — its effect can be seen both in Business impact (credited amount) and in FX effect (if the rate has changed).
• Traceability: check the applied rate in your exports via fx_rate_applied; keep this file as an audit document.
• Security and compliance: data and exports are encrypted in transit and at rest in accordance with our internal security policy.

FAQ

→ Where do the exchange rates used come from?
Fincome retrieves daily the EUR/XXX fixing published by the European Central Bank (~4 p.m. CET). Each invoice/credit note line is converted at the issue-day rate, and this converted amount is stored then used for MRR/ARR recognition.

→ My subscription is in USD, my reporting currency in EUR: what varies?
• Monthly: at each cycle, the new invoice "takes" the current month's rate → the MRR in EUR can vary solely due to FX.
• Annual: the annual invoice "freezes" the rate of its day → the MRR remains stable in EUR over the period (excluding business movements).

→ Why is my MRR curve in EUR going down even though no customer churned?
This may be an effect related to FX variations.
Example (reporting in EUR)**: $100 monthly, EUR/USD goes from 1.07 (Jan.) to 1.12 (Feb.) Jan.: 100/1.07 = €93.46 Feb.: 100/1.12 = €89.29  
Δ FX = – €4.17 without any change on the customer side.

→ Where is the FX effect visible in Fincome?
In MRR/ARR Movements, Fincome systematically separates:
• Business impact (New / Expansion / Contraction / Churn) – converted at the invoice-day rate.
• FX effect – purely currency-related variation between the start and the end of the period.

→ How to reproduce the "FX effect" in Excel for a stable monthly subscription?
If the price in the original currency is constant (e.g. $100), the monthly contribution of the FX effect between m₁ and m₂ is: FX (€) = Amount in currency × (1/tₘ - 1/t₍ₘ₋₁₎) E.g. Jan. → Feb. 2024: 100 × (1/1.12 - 1/1.07) ≈ – €4.17.

→ Do credit notes follow the same logic?
Yes. A credit note is converted at the issue-day rate (like an invoice) and impacts the Business movements of the month concerned; any variation due to the foreign exchange market remains isolated in the FX effect.

→ Can I change the reporting currency?
Yes, by contacting support. An option will soon be available in Settings › Reporting currency. Dashboards and exports will align with the chosen reference currency.

→ How to "neutralize" the FX effect for a board or an executive committee?
Two operational options:
• Business reading: use the New/Expansion/Contraction/Churn drawers and ignore the FX effect in the narrative.
• Numerical series: export and subtract the fx_effect column to present an "FX-neutralized" MRR/ARR.

→ Where to check the rate actually applied per line?
In all detailed exports: check the fx_rate_applied column (ECB rate of the issue day stored by Fincome). Contact Fincome support if needed.

→ Does the FX effect impact my efficiency KPIs (NRR, expansion, contraction)?
Yes, the FX effect impacts all your activity KPIs. An option will soon be available in Fincome to analyze your KPIs cleaned of exchange rate variations.

→ Why does the FX effect seem to affect only part of my base?
• Monthly subscriptions "take" a new rate at each cycle → sensitive to FX month by month.
• Annual subscriptions are insensitive to intra-year FX (rate frozen at the invoice), hence a different mix of effects depending on your subscription structure.

→ I backdated / reissued an invoice: what happens on the conversion side?
The line is (re)processed at the ECB rate of the issue day of the invoice or credit note concerned. Storing the converted amount guarantees the reproducibility of your MRR/ARR figures.

→ What audit granularity is available if the auditor challenges me?
• Rate applied per line: fx_rate_applied.
• Monthly bridge: Business / FX effect separation.
• Traceability: conversion performed at ingestion then stored (identically reproducible on export).

→ Security and compliance: are the conversion data and exports protected?
Yes. Data is encrypted in transit and at rest, managed within a structured security framework (access policies, vulnerabilities, continuity) and steered via formalized risk governance. Your team can request access to our security policies.

Updated on: 03/07/2026