How to calculate FX exposure on open orders

FX exposure on open orders is the base-currency value of every foreign-currency amount you still have to receive or pay, grouped by currency and date. To calculate it, choose one quote convention, give each item a sign (receipts +, payments −), add the items in the same currency and date bucket for the net figure, add their absolute values for the gross figure, and multiply by the rate you want to test.

Choose one quote convention before doing arithmetic

Choose one quote convention before doing arithmetic. This tool stores the amount of base currency for one unit of foreign currency. If the rate moves from 1.2 to 1.1, a foreign-currency receivable of 1,000 loses 100 of base value. A payable of the same size would become 100 cheaper. State the convention beside every scenario so that “currency rises” cannot be interpreted two ways.

If your bank sheet quotes the other way round — for example 150 yen per dollar — convert it once (1 ÷ 150 = 0.00666666666667 dollars per yen) and keep the original quote next to it. Mixing both forms in one spreadsheet is the most common source of a sign error.

Measure gross and net exposure

A 1,000 receivable and a 600 payable in the same currency and date bucket create net exposure of 400, but gross exposure of 1,600. The net number describes directional sensitivity; the gross number still exposes settlement volume and operational timing. Show both.

Worked example at a planning rate of 1.2 base per foreign unit:

Item	Signed amount	Base value at 1.2	Base value at 1.1	Impact
Receivable	+1,000	+1,200	+1,100	−100
Payable	−600	−720	−660	+60
Net	+400	+480	+440	−40
Gross	1,600	1,920	1,760	—

The impact of a scenario is the signed amount × (scenario rate − baseline rate): 1,000 × (1.1 − 1.2) = −100 and −600 × (1.1 − 1.2) = +60, so the net change is −40.

Do not net dates carelessly

A supplier payment due this week cannot always be financed by a customer receipt next month. Date buckets and a cash schedule reveal the mismatch even when eventual foreign amounts offset. If the customer is delayed, move that receipt in a scenario and examine the base-currency cash floor.

For example, a receivable of 10,000 due on 20 November and a payable of 9,000 due on 28 November look like a comfortable natural hedge. With opening cash of 3,000 and a minimum of 2,000, a 30-day delay of the receipt puts the payment first: the balance falls to −7,080 at the end of November — 9,080 below the minimum — although the December total is unchanged.

Find the margin threshold

A sale of 1,000 foreign units with 900 of base costs breaks even at 0.9 base currency per foreign unit. For a 10% margin on revenue, the required rate is 900 divided by 1,000 × (1 − 0.10), which equals 1.0. This is a business threshold, not a rate forecast.

For a purchase priced in foreign currency against a fixed base-currency sale, the threshold is a maximum: with a sale of 5,000 and a foreign cost of 4,400, the break-even rate is 5,000 ÷ 4,400 = 1.136363…, and a 10% margin needs a rate no higher than 4,500 ÷ 4,400 = 1.022727…. When costs sit in a second foreign currency, hold that rate fixed and say so — or look at a sensitivity grid instead of one number.

Use probability only as a planning view

Use probability only as an optional planning view. A planned order at 60% probability can contribute to an expected exposure chart, but it should not replace confirmed commitments in the baseline. Actual partial settlement must reduce the open foreign amount exactly once: a 1,000 receivable with 400 already received leaves 600 open, never 1,000 and never 200.

Common mistakes

Using “the rate went up” without saying which convention: the same move is a gain on receivables and a cost on payables.
Reporting only net exposure and losing sight of the volume that must still be settled.
Netting a payment this week against a receipt next month.
Counting planned orders as if they were signed.
Filling a missing rate with an old or guessed number instead of marking the value as blocked.
Deducting a partial payment twice — once from the invoice and again in the cash forecast.

Checklist

One base currency, one quote convention, every rate with a date and source.
Every open item with type, currency, amount, due date and confirmed or planned status.
Settlements recorded against the item they settle.
Gross and net by currency and date bucket.
A dated cash schedule with opening cash and the minimum you want to keep.
Clearly labelled scenarios for rate moves and delays.
Margin thresholds for orders whose profit depends on the rate.

Limits

These calculations use the rates and dates you enter. They do not predict exchange rates, they are not a recommendation to hedge or to exchange currency, and they are not hedge accounting. Ask your bank or adviser before entering into any financial contract.

FX Orders & Cash Exposure Lab joins portfolio exposure, timing and margin economics. Its fictional importer/exporter demo shows how gross 1,600 becomes net 400, how rate movement changes each side and why a delayed receipt can create a funding problem even with a natural hedge.

Explore the fictional demo · See the full tool