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Oct 21

XERO Accounting Software: Foreign Currency (Part Two)

Posted by Carol-Ann Brouwer at Tuesday, October 21, 2014

Accounting Anywhere - XERO - Foreign Currency

Being a global trainer for Xero is extremely rewarding. Instead of spending hours showing users how to try to get software to kind of, sort of, maybe do what they need, I get to demonstrate how Xero streamlines processes like reporting and reconciling.

That’s right. Running reports on Xero is quick and makes efficient use of your time. Here is a very useful feature for global accounting: Xero offers a Foreign Currency Gains and Losses Report.

This report displays Accounts Payable/Receivable and bank accounts revalued to the base currency.  It further displays Foreign Currency for each currency. (I know! This is too good to be true!) Take a look:

There is no need for manual journal entries. This functionality is creating joy around the world! No more headaches and wasted productivity. Happily the Xero design team didn’t stop improving process there.

Reconciling is efficient and works seamlessly for the different situations that arise for accounting in a global marketplace:

The easiest solution for reconciling is to set up a bank account in the Foreign Currency, allowing your customers to pay the invoice using the currency for which they are billed. This makes reconciling easy. 

 

For example, if my base currency is the U.S., but my customers I need to invoice are in Canada I have a choice:

- I can open a Canadian Dollar Account and have the customers pay in Canadian dollars. This allows me to pay any related expenses in Canadian funds as well as receive payments made in Canadian dollars.

- I could create a Canadian Dollar PayPal Account because Xero handles PayPal bank feeds. This option allows me to collect by Credit Card.

Paid Canadian Amount to a U.S. Dollar Bank Account? No problem. Let’s look at the bottom of the invoice screen (note the screen allows for entering the Exchange Rate):

Accounting Anywhere - XERO - Foreign Currency

These are some basics available when using the Foreign Currency. The option to process banking service charges can all be handled as per the usual way on the Account Reconciliation screen.

There are some limitations to Foreign Currency in Xero:

- Expense Claims - no foreign currency options
- Xero to Xero Network Key - both the Sender/Receiver must be in same currency
- Inventory Items - currently do not offer Foreign Currency options

Curious to see how Xero works? Set up a free trial in Xero and try it out, so you can see how simple and easy it is to use. You can also check out the videos prepared for the Xero Help Centre for additional information.

Always seek tax advice for your Accounting Professional when dealing with Foreign Currency and particularly the necessary sales tax obligations.

And if there’s anything else at all, don’t hesitate to get in touch with the Accounting Anywhere team. We live and breathe Xero, Foreign Currency, Cloud Accounting, Bookkeeping and more.


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