The conversion rate is helpful for a company that has multiple branches globally.
Let's say you are a Malaysian company and owned another branch in Singapore. The main currency used by the company is Malaysia Ringgit(MYR). So, all other cost centers that have different currency(not in MYR) would be converted to MYR(based on the conversion rate set early) then only show at procurement reporting.
The cost center Singapore has spent SGD 6,000 to buy office equipment. The conversion rate set is 1 MYR equals to 0.50 SGD. Our system will auto convert the spending of cost center Singapore to MYR. Hence, in the procurement report, the amount display will be MYR 12,000.