How to Set Up Multiple Currencies in Xero

How to Set Up Multiple Currencies in Xero

Welcome to the Fit Small Business Xero training
course! In this lesson, we’re going to cover how
to set up multiple currencies in Xero. To follow along with me, log into your Xero
account now, or click the link below this video for a free 30-day trial of Xero. You can also click this link to access our
full Xero course and other helpful resources. Let’s get started! With today’s advanced technology, it’s
pretty easy to do business with customers and suppliers located anywhere in the world. In today’s flat, hyper-connected economy,
US small businesses can tap into customer bases and labor markets in any number of countries. It’s not uncommon to be billing a client in
Germany for a project that utilized contractors from Brazil. Xero’s powerful multi currency accounting
will help you bid, bill, and transact in the currency that’s most advantageous to your
small business. Even better, the reporting won’t leave you
cross-eyed since all of your transactions can be reported in your native currency (USD). There are many benefits to using the multiple
currency feature in Xero. We will discuss each of these in detail in this lesson. Some tips to keep in mind when setting up multiple currencies are: You must be signed up for a Premium Edition
pricing plan in order to use the multiple currency feature. Multiple Currency is not available with the
Starter or Standard editions of Xero. Your base currency is your default currency
in Xero. Most of your reports will use this currency. This was set up in the Organization and Financial
settings lesson. You can click here to access this lesson. You can add as many currencies as you need
to (up to 160 currencies to choose from) but once you add a foreign currency you cannot
delete it. We will use our fictitious company Acme Web
Pros Plus to demonstrate how multiple currency works. To set up multiple currency, from the Xero
Dashboard, navigate to General Settings as Scroll down to the Features section, and select Currencies. To add a currency, click on the “Add Currency” button and select the currency from the drop down. We’ll go ahead and select the New Zealand Dollar. You’ll notice a message that says: The next step is to click the add currency button Remember, once you add a currency to Xero you cannot delete it. Some of the benefits of using the multiple
currency feature in Xero are: Hourly Exchange Rate Updates: Exchange rates for over 160 currencies are updated on an hourly basis in Xero. This information comes directly from With multiple currency, you can see the exchange
rate that was used on a previously entered transaction, today’s exchange rate, or run
a report to see the conversion rate that was used for a previous transaction. Send/Receive documents in a Foreign Currency:
As mentioned in the previous section, you can send and receive invoices, purchase orders,
project bids and contract proposals in a foreign currency. For example, you can submit or receive bids
in a foreign currency with the confidence that you’re accurately gauging the value
in your native currency. Let’s say you bid on a project with a partner
in Italy. The work will be done by contractors in Chile
and India. Xero will do the calculations behind the scenes
so that you can bill and pay all parties in their native currency but still track and
run your reports in your native currency, Change/Edit Exchange Rates:
While the exchange rates are updated hourly in Xero, you may have an agreed-upon exchange
rate with your supplier or your customer that you would like to use instead of the current
rate. You have the ability to change the exchange
rate directly on an invoice or a bill. We will cover how to do this in the how to
invoice a customer and how to create a bill lessons. Click the link below to access these lessons. Add a Bank or Credit Card Account in a Foreign
Currency Xero’s multiple currency feature also allows
you to manage your foreign bank and credit card accounts. Since the exchange rate is updated hourly,
you always know the value of your foreign held assets in your native currency. This will allow you to make the wisest use
of your funds. In the how do I set up a bank/credit card
account lesson, we will walk through the steps of how to set these accounts up with the appropriate
currency. Click the link below to access this lesson. Assign a Currency to a Customer or Vendor
Contact This is another benefit of using the multiple currency feature. This allows you to view account balances in
the foreign currency, and create new transactions that will automatically default to the currency
that you have assigned to a customer or supplier. By automatically viewing the converted rates,
you can ensure that you never send an invoice, submit a bid or pay a bill in a currency that
would result in an over/underpayment. We will walk through how to set this default
currency up in the how to invoice a customer and how to create a bill lessons. To access these lessons, click the link below
this video. Foreign Currency Reports
Xero automatically keeps track of all of the exchange rate calculations for every transaction
so that you don’t have to. All of your reports display these transactions
in your native currency, including foreign held assets. The same is true for all accounts receivable
and accounts payable. However, there are 3 reports in Xero that
can be displayed in another currency; the balance sheet report, income statement and
budget variance reports. By default these reports will display in your
native currency but you can easily change the report options to display the currency
field where you can choose one of the other currencies you have set up for your organization. Finally, there are three foreign currency
reports available for you to run in Xero. The Foreign Currency gains and losses report,
the Realized Gains and losses report and the Unrealized gains and losses report. Let’s go ahead and see how to run the Foreign Currency Gains and Losses
Report From the reports menu, select All Reports. Scroll down to the accounting section and find Foreign Currency Gains and Losses. This report shows your accounts payable, accounts
receivable and bank accounts revalued in your base (home) currency. It also shows your organization’s current
foreign currency exposure for each foreign currency you have set up. Let’s go ahead and run this report. Select your date range. Click update. Here is a sample Foreign Gains and Losses
Report for the January 1st to March 31st time frame. The second report that I mentioned, the Realized Gains and Losses Report, will show the gains or losses for
each transaction. To get to this detailed report, you have to
drill down on the realized gain located on the Foreign Currency Gains and Losses report here. We have our Realized Gain column here. So if there are any figures in this column, you can drill down to see realized gains and losses. The third report that I mentioned is the Unrealized
Gains and Losses Report That column is located right here, next to Realized Gain. This report shows the current value on the
gains or losses on current outstanding sales invoices or bills. To get to this detailed report, you have to
drill down on the unrealized gain totals located on the Foreign Currency Gains and Losses report. That wraps up the lesson on how to set up
multiple currencies in Xero. To access our full Xero course or any of the
other lessons in this series, click this link. You can also find a link below this video
for a free 30 day trial of Xero. If you have feedback about this course or
if you have any questions, please leave a comment below. Also don’t forget to subscribe!

One thought on “How to Set Up Multiple Currencies in Xero

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