00:00If you're selling internationally to customers in the UK, Europe, Australia, or anywhere outside your home country,
00:08and you're still doing currency conversions manually, you're wasting time and risking errors in your books.
00:15Xero has a built-in multi-currency feature that handles all of that automatically.
00:20In this video, I'm going to show you exactly how to set it up, how it works day to day,
00:25and what you need to know before you turn it on.
00:28Let's get into it.
00:30Quick note before we start, multi-currency in Xero is only available on the established plan, which is $90 per
00:38month in the US.
00:39The early plan at $25 per month and the growing plan at $55 per month do not include multi-currency.
00:47So if you're on one of those, you'll need to upgrade first.
00:51Note, UK plan names are Starter, Standard, Premium.
00:55Multi-currency is on the Premium tier.
00:58Pricing varies by region.
01:01If you're a new Xero customer, check the link in the description.
01:04There's currently a discount code that gets you 85% off your first six months.
01:09That's a significant saving if you're just getting started.
01:13Section 1.
01:14What Xero Multicurrency Actually Does
01:16Here's the core functionality and why it matters.
01:20When you enable multi-currency in Xero, you can invoice customers in their local currency, send a Euro invoice to
01:28a customer in Germany or a GBP invoice to someone in the UK.
01:32Pay bills in foreign currencies.
01:35If you have suppliers in other countries, pay them in their currency directly.
01:40Track Exchange Rate Movements
01:42Xero pulls exchange rates automatically.
01:45Rates are set at the final daily rate at 11 p.m.
01:49and you can view mid-market rates updated hourly throughout the day.
01:53Record foreign currency gains and losses.
01:56When exchange rates move between when you invoice and when you get paid, Xero automatically calculates the difference and logs
02:04it.
02:04Run reports in multiple currencies.
02:07Your P&L, balance sheet, and budget reports can all be viewed in your base currency or converted.
02:13You can transact in over 160 currencies.
02:17Xero pulls rates from Xe.com.
02:20One important thing.
02:22Your base currency, the home currency you set when you first created your Xero organization, cannot be changed after setup.
02:29So if you set it to USD, all your reporting ultimately rolls up in USD, even if you're invoicing in
02:37EUR, GBP, AUD, or anything else.
02:41Section 2. How to Enable Multicurrency
02:45Assuming you're already on the established plan, here's how to turn it on.
02:50Step 1. Log in to Xero.
02:52Click on your organization name in the top left corner.
02:55Step 2. Go to Settings, then click Currencies.
02:59Step 3. Click Add Currency.
03:02Step 4. Select the currency you want to add from the drop-down.
03:06For example, GBP for British Pounds, EUR for Euros, AUD for Australian Dollars.
03:13Step 5. Click Add Currency to confirm.
03:17That's it. The currency is now active in your account.
03:20A few things to know.
03:22Once you add a foreign currency, you cannot delete it.
03:25You can add currencies on the fly while creating a transaction, too.
03:29You don't have to do them all up front.
03:31You can add as many currencies as your business needs.
03:34There's no hard limit.
03:36After adding a currency, Xero will immediately start pulling exchange rates for it.
03:45If you actually hold money in a foreign currency, like if you have a Stripe account in EUR or a
03:52PayPal account receiving GBP, you'll want to set up a foreign currency bank account in Xero to match.
03:58Here's how.
04:00In Xero, go to Accounting, then Bank Accounts, then Add Bank Account.
04:05When you set up the account, select the currency it holds.
04:09Xero will track that account balance in the foreign currency and show you the converted value in your base currency
04:15on the dashboard.
04:16When exchange rates move, Xero will flag unrealized gains or losses on those balances, which matters for your financial reporting.
04:25Pro tip.
04:26If you use WISE or Airwallex for holding multiple currencies, you can connect those accounts directly to Xero for automated
04:34bank feeds.
04:35This saves a lot of manual entry.
04:37Section 4. Creating a Foreign Currency Invoice
04:41Once currencies are set up, invoicing in a foreign currency is straightforward.
04:46Go to Plus icon on the right, then Invoice.
04:50When you select the contact, your customer, if you've previously assigned a default currency to that contact, Xero will auto
04:57-populate the invoice in that currency.
05:00If not, you can manually change the currency on the invoice itself.
05:04Xero will apply the current exchange rate automatically,
05:08but you can also manually override the rate if you've agreed a fixed rate with your customer.
05:13This is useful for protecting yourself from rate fluctuations on larger deals.
05:18The invoice will display in the foreign currency to your customer.
05:22In your books, Xero records the foreign currency amount and the base currency equivalent at the time of the transaction.
05:29When the payment comes in, if the rate has shifted, Xero automatically calculates and posts the foreign currency gain or
05:37loss.
05:37You don't have to do this manually.
05:40Reporting
05:40This is where multi-currency in Xero really earns its keep for sellers operating internationally.
05:47Foreign Currency Gains and Losses Report
05:50Found under Reports in Xero
05:52This shows you your total exposure by currency type.
05:56If you're holding a lot of EUR receivables and the EUR weakens against your base currency,
06:01this report quantifies exactly what that means for your bottom line.
06:06Balance Sheet and P&L in Foreign Currencies
06:09On the established plan, you can view your balance sheet and profit and loss reports converted into any currency you've
06:16added.
06:17This is useful if you have a parent company or investors in another country who need reports in their currency.
06:24Revalued Balances
06:25For any bank account or outstanding balance held in a foreign currency,
06:30Xero can revalue it to your base currency as of any given date.
06:34This is important for month-end closes and accurate reporting.
06:38Section 6
06:40Key Things to Watch Out For
06:42A few gotchas to be aware of.
06:441. Downgrading loses your multi-currency data access.
06:49If you ever drop from the established plan to growing or early,
06:53you lose the ability to view multi-currency reports and run FX reports.
06:58The data isn't deleted, but you can't access it until you upgrade again.
07:022. Historical Exchange Rates Don't Sync Automatically
07:06If you're migrating from another accounting system, Xero won't pull in historical FX rates from your old software.
07:14You'd need to map those manually or work with a migration specialist.
07:19This can create discrepancies in older reports if not handled properly.
07:243. Base Currency Is Locked
07:27As mentioned, set your base currency correctly from day one.
07:32If you're a U.S.-based seller, that's USD.
07:35If you're U.K.-based, it's GBP.
07:38You cannot change this later.
07:414. Stripe and PayPal Currency Handling
07:44If you use Stripe or PayPal and they're converting currencies before depositing to your bank,
07:50you may end up with already converted transactions hitting Xero.
07:55In that case, set up the bank account in Xero to match the currency after conversion
08:01to avoid double-counting FX differences.
08:04That's everything you need to get Xero multi-currency set up and running for your international sales operation.
08:11If you're not on the established plan yet and you want to try Xero,
08:16there's a link in the description with a discount.
08:18New customers in the U.S. can get 85% off for the first six months.
08:24Worth checking out if you've been on the fence.
08:26If this video helped, hit like and subscribe.
08:29I cover Xero, accounting software comparisons, and tools for e-commerce sellers regularly on this channel.
08:37Drop any questions in the comments and I'll answer them.
08:40See you in the next one.
08:42I'll see you in the next one.
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