When you have a business consisting of international clients, it can be challenging, particularly as it pertains to payment transactions. There may be customers who pay using Dollars or others who pay using some other currency, euros or pounds. It can take time to keep track of such payments and convert them into your local currency.
This is where Zoho Books can help. Zoho Books allows businesses to record transactions in foreign currencies and convert them into their base currency using applicable exchange rates.
What Is ‘Multi-Currency’ in Zoho Books?
Multi-currency is a Zoho Books feature that allows businesses to do transactions in multiple currencies.
For instance, if your business is based in India, but you have customers in the USA, you can issue an invoice in USD rather than in INR.
Zoho Books can help manage exchange rates and generate financial reports in the base currency. Exchange rates and transaction records should still be reviewed for accuracy.
Multi-currency availability and related features depend on the Zoho Books plan and regional edition. Verify the current plan details before publishing this claim.
Setting up Multi-Currency in Zoho Books
It’s not very difficult to set up multiple currencies. Here’s what you need to do.
Step 1: Check Your Base Currency
Your “base currency” is the primary currency utilised for your business accounts.
To check it:
- Log in to ‘Zoho Books’.
- Click Settings.
- Go to Settings, navigate to Currencies under Organization Settings, and select the required option.
- The base currency is the currency checked.
Typically, businesses based in India are registered in INR.
Step 2: Add New Currency
If you set your base currency first, you can add others.
- Go to Settings, then choose Currencies.
- Click + New Currency.
- Select the currency (USD, EUR or GBP).
- Make sure that the currency code is correct, as well as the currency name.
- Set the required decimal places and currency display format, then save the currency.
- Click Save.
You now have a new currency available to use!
Step 3: Set Up Exchange Rates
Exchange rates indicate the ratio of the value of one currency to the other.
You can use an external exchange rate service to update Zoho Books with the automatic exchange rate.
Rates can also be typed in.
To do this:
- Go to Settings -> Currencies.
- Turn off exchange rate feeds.
- Disable exchange rate feeds if you want to enter rates manually. Select the required currency, open View Exchange Rates, click + Add Exchange Rate, enter the effective date and exchange rate, and save.
- Add exchange rates by clicking on +.
- Type in the date and rate.
- Click Save.
Zoho Books can fetch exchange rates automatically. If rates are entered manually, ensure that the applicable rate and effective date are correct.
How to use the Multi-Currency feature within Zoho Books
With the added currencies, you can begin transacting business with them.
Activate a customer with a foreign currency
Your product is priced in British pounds, and you have a UK customer who wants to be charged (or pay) in pounds.
Here’s what to do:
- Click on Sales and then Customers.
- Click + New.
- Fill in the customer’s information.
- Under Other Details, select GBP, as it’s already current.
- Save the customer.
You can now create invoices for that customer in pounds.
An invoice in another currency will be created:
The process for generating a foreign currency invoice is similar to generating a normal invoice.
Zoho Books applies the relevant exchange rate to convert foreign currency transaction values into the organisation’s base currency for accounting and reporting.
Select your customer, and enter the products/service and the amount.
Zoho Books applies the relevant exchange rate to convert foreign currency transaction values into the organisation’s base currency for accounting and reporting
Before sending the invoice, review it.
Record Payments in Foreign Currencies
If the customer has paid you, note it as well.
Navigate to Payments Received, select the customer and relevant invoice, enter the payment details, and verify the currency and amount before saving.
Before saving, ensure that you have the right amount and check the currency.
It’s an excellent way of knowing which paid and unpaid invoices you eventually have to deal with.
Manage Multiple Currencies for One Customer
What if the same customer pays for one project in dollars and not the other?
For those transactions that must be in multiple currencies, there is a Multi-currency Transactions for Each Contact feature available on Zoho Books.
To enable Multi-currency Transactions for Each Contact, navigate to Settings, select Customers and Vendors under Preferences, enable the feature, and save. This feature is available only on the Elite and Ultimate plans in the Indian edition.
This feature is available only on select plans.
Final Thoughts
Making payments overseas is not a complicated matter. Add currency, create foreign invoices and track foreign payments, all on Zoho Books.
First, you should check your base currency. Next, include the currencies you want, and take a look at your exchange rate options.
When all is set, it will be so much easier to do business with foreign customers.
FAQs
How do I enable multi-currency in Zoho Books?
Navigate to Settings, open Currencies, and add the required foreign currencies. Confirm that your Zoho Books plan supports multi-currency invoicing.
What is a base currency in Zoho Books?
The base currency is the primary currency used to maintain your business accounts and financial reports.
Can I record foreign currency payments in Zoho Books?
Yes, you can record payments in the currency of the relevant invoice, subject to the applicable multi-currency configuration.
Which currencies can I add to Zoho Books?
You can add supported currencies such as USD, EUR, and GBP, depending on your business requirements.
