Accounting for Multi-Currency Businesses

Accounting for multi-currency businesses can be a complex process, but having the right tools and strategies in place can make it much easier. It’s important to have a system that can track and convert all of your transactions into a single currency, as well as keep track of exchange rate fluctuations and other factors. You should also make sure to monitor any changes in tax regulations that could affect your business. With the right tools, you can make sure that your accounting processes are efficient and accurate.

For Canadians with small businesses that operate internationally, recording multi-currency can be challenging and confusing to start with. As we start building our businesses, having the right systems in place is helpful. 

To keep things simple, you can use accounting software to invoice in multiple currencies and then Xero will track all the currency conversions

For Canadian businesses, we must report in Canadian dollars. All the more important to use accounting software that will find the currency exchange rate and convert it to Canadian dollars automatically. Then the difference will get recorded to an unrealized or realized exchange account. You no longer have to do the math and make sure you use the right currency rate. It actually doesn’t matter if you never literally exchange foreign cash to Canadian cash, it all gets reported in Canadian Dollars regardless of how you’re currently holding it. 

Finally, getting paid in multiple currencies can be a little complex for Canadians. Most of my clients get paid to their Wise accounts and transfer to their Canadian Dollar accounts from there. Some of the big banks will let you open US Dollar accounts but rarely can you have multiple different currency accounts.

If you have any questions about currency or currency conversion for your business, book an Ask a Bookkeeper clarity session and we will go through it all!