Are you familiar with multi-currency conversions? They’re not just important to accountants, but to anyone working with inventory values and multiple countries. Let’s have a conversation about manual and automatic multi-currency conversion.
If you have vendors, customers, and/or employees in more than one country, you know that you have to deal with multiple currencies. Every currency you receive that is different than the one you use normally must be converted into your home currency for tax purposes, as well as for correctly valuing your inventory and sales. Manual multi-currency conversions must be performed by hand every time you make a business deal with an entity or person outside of your country.
Currency exchange rates are a moving target. They change on a near-constant basis, so even if you’re very well-versed on them one day, that information could be outdated the next. Also, if a decimal point gets put in the wrong place or a number gets entered incorrectly, it could lead to all sorts of problems with your bookkeeping and inventory valuation.
Turn your multi-currency conversions in sales orders and purchase orders over to a business automation platform and you’ll find that it’s able to keep up with the ever-changing exchange rates. Also, it will be able to automatically convert virtually any currency into your preset home currency that you use for accounting and inventory management purposes. Vendors and customers in different states and countries can be assigned different currencies that are easy for the system to convert for you. It then transfers the correct numbers to QuickBooks or Xero to be recorded in the general ledger.
Automating multi-currency conversions is a big benefit to your company. You won’t have to worry about the wrong numbers being calculated and added to your inventory and accounting systems. Those crucial calculations are done for you. All you have to do is keep the sales coming in from whichever countries and states you wish to focus on, and your business automation platform will handle the necessary multi-currency adjustments for proper bookkeeping.