SAP Business One supports three types of currencies:

Local Currency - This is, in most cases, the formal currency of the country. In SAP Business One, all the reports displayed in the local currency, and all the foreign currency transactions are translated automatically to local currency. This way, the local currency is the common denominator for all currencies, which enables balance calculation of accounts/business partners specified as All Currencies .

System Currency - This currency is for reporting purposes only, for companies that report in a currency different than the local currency (for example, a European subsidiary company which reports to an American parent company). After defining the system currency and setting the daily exchange rate, all monetary activity is translated accordingly to the system currency in addition to the local one. Then, you can display accounting reports, marketing documents and balances in system currency.

Foreign Currency - All the currencies other then the local currency. The foreign currencies are defined by the user in SAP Business One according to the company's requirements.  

Conventional Unit (Russia) -  support the need of companies to define virtual currencies due to local currency fluctuations. A currency specified as Conventional Unit acts as any other foreign currency, except for when exchange rate differences take place. The rate of the conventional unit in the local currency is defined upon agreement between the company and its business partners.

Enables the user to choose one of the following rounding methods:

By Currency - Supports working with rounding account in which the rounding differences are posted. In this method the rounding is made for each currency individually, according the parameters defined by the user.

By Document - Relevant only for sales document. In this method there is no rounding account, and the rounding differences are displayed in the rounded document as discount.

In Czech Republic, Hungary, Poland, Russia, and Slovakia the only rounding method available is By Currency . 

Enables the user to enter the updated exchange rates of all the foreign currencies defined in SAP Business One and any required indexes. The indexes are used when revaluations take place.

The exchange rates that are entered in the table are used in foreign currency transactions and documents . When copying base document to target document (either by using the Copy From or Copy To options), you can also copy the document and line exchange rate from the base document to the target document. 

SAP Business One supports two methods of exchange rate calculation: direct and indirect.  For example, if the local currency is US Dollar, and the selected method is Direct, the user inserts the rate according to the foreign currency (How many Euros are worth one Dollar).

while if the selected method in the same company is Indirect,  the user inserts the rate according to the local currency (How many Dollars worth one Euro).

Both exchange rates table and indexes table can be imported and exported from one company in SAP Business One to another. 

Exchange Rates Table for Reports (Hungary) - as companies can decide whether to generate VAT reports according to the exchange rates used when accounting transactions took place or according to exchange rates published by the central bank, an additional exchange rate table is provided. In this exchange rate table companies maintain the exchange rates to be used when reports are generated. The usage of this exchange rate table is per report, and not in company level.  

Enables users to quickly and easily generate any number of financial report templates for any purpose, such as generating additional profit and loss statements.