Xero - beautiful accounting software

Xero Business Community

Xero Business Community

Hi everyone, Come on over to the new discussions in Xero Central. It’s a more intuitive way to connect and chat all things business with one another. Ask questions, dish out answers, and get involved.

You can still view topics in the Xero Business Community to see all the useful knowledge that’s been shared there; and you can restart conversations you feel have been of huge value to you on Xero Central.

If you have brilliant ideas for innovations, you can keep on adding feature requests in the Xero Business Community, and voting on existing requests. There’s more in store, as we come up with the best way to take on your thoughts and share developments
Community > Accounting >

Should we use multi-currency or not?

Started by Fergus Macdonald -   in Accounting

Hi there,

We're just starting to use Xero and are wondering whether we should use the multi-currency feature or not.

We are based in the UK so deal primarily in GBP. All our sales and post of our expenses are in GBP, but we work with a few people who bill in USD - for example for online software.

Up until now, we've always put the invoices through our accounts in GBP. So we wait for the funds to come out of the bank, then put the invoice total as whatever we got charged from the bank in GBP, even though the actual paper invoice may be in USD.

I'm wondering if we should continue to do this, or if Xero's multi-currency feature would be a better option.

Any advice/input from people that have used it would be much appreciated.
Unless you have a USD bank account, I would stick with single currency if what you're currently doing is working for you.

Personally I would only use multi-currency if you have multiple currencies in one of the following: 1 bank accounts, 2) client billings, 3) significant long-term liabilities or accruals
 

Don Hitchen  

Hi Fergus,

Why not try Multicurrency for a month or so and see if it helps.

We have a client without any foreign currency accounts who are dealing with imports invoiced in USD. They have found the move to Multicurrency a real benefit as the lag between invoicing and settlement moved the price a fair bit. Using Multicurrency they had better visibility on the exchange rate fluctuations without the effort of constant calculations.

If it doesn't work out then you can always go back down a plan. The price of finding out is not much in the scheme of things I think.

Cheers
 

Alan Griffin  

Hi Fergus, as Don mentioned, if just using the single currency is working for you, then there's really no need to go multi-currency.
However, if you needed to have the supplier invoices in there before the payment came out (for example if you needed to lodge your VAT return or end of year accounts/company tax return) and dealt with alot of these overseas invoices then multi-currency might be an option to consider.
 

Elizabeth Salter  

Thanks for the input guys.

@Alan - do you know if you can simply switch into then out of multi-currency easily like that?

@Don/Elizabeth - I do quite like the "if it aint broke", just want to make sure we're not doing something a little silly that could be handled easily by a feature that Xero has.
 

Fergus Macdonald  

Hi Fergus,

It shouldn't be a problem, but you can always check with support if you want complete clarification. Hope that helps :-)
 

Alan Griffin  

Yeah good shout. I think I read somewhere that you could and it would just drop that functionality after you downgraded again. Will check it out in more depth though.

Any other opinions on this very welcome.
 

Fergus Macdonald  

@Fergus - here's some information on adding multi-currency to your plan as well as removing it. If you decide after a while it's not right for you and you remove it. Please take note of the tips on changing to a smaller plan - while you can still see everything entered in a foreign currency, there might be things you want to do to pay invoices etc in various currencies before you no longer have access to it.
 

Catherine Walker (Community Manager)