Secure Currency Invoice For Free

You provide customers with quotes and invoices in two currencies, U.S. dollars and the buyer's local currency. This practice is common for exporters around the globe, especially in Europe where multiple currencies are used frequently. Here's an example of how a U.S. exporter could invoice in two currencies.

When entering invoices, credit notes, and quotes, you should create them as usual. However, you should also consider the following: The default exchange rate appears in the top section of the invoice or credit note. If you chose to use live exchange rates, this is the most up to date rate from the FRS.

Foreign currency invoices are legally compliant with your country's regulations. If compliant, your prices are accurately converted into the foreign currency using an up-to-date exchange rate. Any variations in the exchange rate that lead to exchange gains and losses are accounted for so your books still add up.

At the date a foreign currency transaction occurs, each asset, liability, revenue, expense, gain, or loss arising from the transaction is recorded in the functional currency of the recording entity using the exchange rate in effect at that date.

Manually record the Invoice payment in the customer's currency (say GBP) to the Undeposited Funds account. Provide the appropriate exchange rate for customer's currency and base currency while recording the payment. Now, the Undeposited Funds will have the payment amount in the base currency (USD).

Foreign currency invoices are legally compliant with your country's regulations. If compliant, your prices are accurately converted into the foreign currency using an up-to-date exchange rate. Any variations in the exchange rate that lead to exchange gains and losses are accounted for so your books still add up.

Exchange rates can be effectively locked in using currency futures, forwards, or options, each of which has pros and cons. For smaller amounts, the money market hedge may be preferable to ETFs for locking in an exchange rate.