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Foreign currency transactions

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Summary

How to enable and use foreign currency transactions in Sage Accounting.

Description

 NOTE: This topic describes a premium feature. See Growing your business with Sage to learn more about upgrading your subscription.

If you trade with companies based overseas, you can process foreign currency transactions. This allows you to record invoices, credit notes, payments, and receipts in different currencies.

You can choose to use live exchange rates from the European Central Bank (ECB). These update daily so you’re always using the most up-to-date rate. You can also track any losses or gains because of changes in the rate.

Resolution

Before you start processing using different currencies, you need to:

  • Enable foreign currency transactions
  • Enter the correct currency in your contact records

Enable foreign currency transactions

  1. Go to Settings, then Business Settings. In the Financial Settings section click Currencies.
  2. Select Enable Foreign Currency Transactions.
  3. To use the most up-to-date exchange rates from the ECB, select Use Live Exchange Rates check box.
     NOTE: If you choose not to use live exchange rates, you must manually enter the rates for the currency. You can do this from here or, you can enter the rate when posting individual transactions.
    We create three currencies for you, Euro (EUR), Pound Sterling (GBP) and US Dollars (USD). You can set up the currencies listed here > 
    You can’t delete your base currency, Pound Sterling, or a currency that’s in use. If you need to delete any currencies not in use, select the Delete button
    .
  4. To add a new currency, on the next available line, from the drop-down list, choose the currency you want.
     TIP: If you choose to use live exchange rates, the latest rates from the ECB appear. When entering foreign currency transactions, we use the most up-to-date rate from the ECB. This is not the exchange rate as at the date of the transaction. You can overwrite the exchange rate if required. If you chose not to use live exchange rates, manually enter the rate.
  5. Check or enter the following information:
    • Bank Charges Ledger Account: This is the nominal ledger account used for any bank charges you might incur. If required you can change this
      For example, to keep a record of how much foreign transactions cost you in bank charges, you may want to use a separate nominal ledger account to the one you use for normal bank charges
      If necessary, you can create a new code from Settings. From the Accounting Settings section, click Chart of Accounts. For more information read our Review the chart of accounts article >
    • Exchange Rate Gains and Losses Ledger Account: If the exchange rate changes between creating an invoice and receiving or making a payment, the difference posts to this nominal ledger account
      This helps you keep track of how much you gain or lose through changes in the rates
  6. Select Save.

You’ve successfully enabled foreign currency transactions and chosen your currencies. You’re now ready to check the currency settings in your customer and supplier records.

 TIP: If you need to record interest and charges from your bank, you can enter this information when reconciling your account. Just click on the Interest and Charges option and enter the information, then click Save. For more information read our Reconcile your bank account article >


Check or enter the currency in your contact records

  1. Go to Contacts and select Customers or Suppliers. Then select the required contact.
  2. Go to the Options tab and in the Account Details section select Currency. Choose the required currency.
  3. If you haven’t already done so, if the contact is VAT registered, enter the VAT registration number and ensure the address shows the correct country.
  4. Select Save.

 NOTE: If you’ve already entered transactions on an existing contact record, you can’t change the currency. Instead, you need to create another contact record for the customer and choose the currency you want to use. For more information read our Create a customer contact article >

You’re now ready to start processing foreign currency transactions.





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