---
title: "18 \u2014 (Optional) Hedge Your Currency Risk"
space: "Setup Guide"
url: "https://jmtradelink.com/setup/18-forward-booking"
updated: "2026-07-13"
---
When you sell in a foreign currency, the rupee value of that order moves every day with the exchange rate — that's your currency exposure. Booking a **forward contract** with your bank locks in a rate today for money you'll receive later. This section is optional: skip it if you don't hedge, or if your bank relationship doesn't use forwards. If you do hedge, this is how you record the booking and link it to the export order it protects.
## Before you start
- You need a **submitted Sales Order** to hedge against — see [Price It, Quote It, Win It](/setup/10-quote-and-win). A forward is booked *against* an order's exposure, so the order must already carry an amount and a currency.
- Your bank must exist as a record in the system (a standard **Bank** master) so you can pick it on the booking.
The whole journey of this section:
```mermaid
flowchart LR
so["Submitted Sales Order
(foreign-currency exposure)"] --> book["Book a Forward
Underlying: link the Sales Order,
Amount Covered"]
book --> reflect["Sales Order Exim tab:
Amount Hedged rises,
Amount Unhedged falls"]
reflect --> pay["Buyer pays →
Payment Entry against the invoice"]
pay --> consume["Forward Booking Utilization
consumes the covered amount"]
```
## Steps
### 1. Open a new Forward Booking
1. Go to the **Forward Booking** list — search for "Forward Booking" in the top search bar.
2. Click **Add Forward Booking** / **New**.
**How you know it worked:** a new Forward Booking form opens with **Hedge**, **Currency**, **Booking Date**, **Bank**, **Margin**, **Status** and **Company** pre-filled with defaults you can accept or change. Only **Booking Ref**, **Amount USD Book**, **Current Rate**, **Premium**, **Maturity From** and **Maturity To** are genuinely blank and need filling in.
### 2. Fill in the booking your bank confirmed
Enter the deal exactly as your bank confirmed it:
- **Booking Ref** — the reference number your bank gave you for this forward (a free-text label, not auto-generated).
- **Hedge** — **Export** for money you're going to receive (this is the case for nearly every deal in this guide) or **Import** for money you owe.
- **Currency** and **Amount USD Book** (or whichever currency your exposure is in) — the amount your bank agreed to convert.
- **Current Rate**, **Margin**, **Premium** — the pricing your bank quoted. **Booking Rate** is not something you enter — it's calculated automatically as **Current Rate + Premium − Margin**, and is the rate that will actually apply when the contract matures.
- **Booking Date**, **Bank**, **Maturity From**, **Maturity To** — when the deal was struck, which bank it's with, and the window in which you must deliver the currency.
- **Company** — the company this hedge sits under.
Click **Save**.
**How you know it worked:** **Amount Outstanding** and **Outstanding INR** fill in on save — the rupee value of what's still uncovered by a matching export.
### 3. Link it to the Sales Order it covers — the Underlying table
Scroll to the **Underlying** section. This is where you tell the system *which* export order this forward is protecting:
1. Add a row in the **Forward Booking Underlying** table.
2. Set **Link to** = **Sales Order**, then **Document** = the order (e.g. `SAL-ORD-2026-00003`).
3. Enter **Amount Covered** — how much of the booking you're applying to this order. You can split one forward across several orders, or cover one order with several forwards, by adding more rows.
4. Click **Save**, then **Submit** the Forward Booking.
**How you know it worked:** **Total Underlying** at the bottom of the table matches the sum of your **Amount Covered** entries, and the document status reads **Submitted**.
The **PSR Limit** block above the Underlying table is informational — it shows the exposure limit your bank has set for you, so you know how much more you can hedge without breaching it.
### 4. Watch the Sales Order pick up the hedge
Go back to the **Sales Order**, open the **Exim** tab, and look at the **Shipping Details** section again.
**How you know it worked:** **Amount Hedged** (in the order's currency) now shows the amount you just covered, and **Amount Unhedged** has dropped by the same figure — the system computed this the moment you submitted the Forward Booking, with no action needed on the order itself.
Do not edit **Amount Hedged**, **Natural Hedge** or **Amount Unhedged** by hand — they're read-only for a reason: they always have to agree with the Forward Bookings actually linked to this order.
If you booked several forwards against the same order, **Amount Hedged** is their combined total; **Amount Unhedged** is simply the order value minus that total, so it can never go negative on its own.
### 5. Let payments consume the hedge
You don't need to do anything extra here — it happens as a side effect of the normal flow. [Raise the Export Invoice](/setup/15-sales-invoice) opens a BRC record that tracks the buyer's payment; when that buyer's **Payment Entry** is recorded against the invoice for this order, it draws down the Forward Booking's **Utilization** — the portion of the booking that has actually been used to settle a real payment, as opposed to just being earmarked against an order.
**How you know it worked:** on the Forward Booking, **Total Utilization** rises and **Amount Outstanding** falls as matching payments come in — until, once the full booked amount has been paid against, the forward is fully utilised.
## Where this goes next
Hedging runs alongside the main chain rather than feeding into another step — the export itself carries on through [Run the Shipment](/setup/12-shipment) and [Raise the Export Invoice](/setup/15-sales-invoice), whose BRC record then tracks the buyer's payment against this same order, with the Forward Booking quietly keeping score of how much of the deal's currency risk is covered.