Working with foreign currency
Sales Scribe lets you invoice customers and record bills in currencies other than your own, while keeping your books and reports in a single home currency. This guide explains how that works and — importantly — how currency movements can produce a small gain or loss that Sales Scribe records for you automatically.
Your functional currency
Every organisation has one functional currency — its home, or reporting, currency. It is set when the organisation is created. All your reports and account balances are expressed in it, no matter what currency the individual documents were in. See Set your functional currency.
A document's currency
An individual invoice, quote, credit note or bill can be in a different currency — its document currency. When you create a document, Sales Scribe chooses its currency automatically, in this order:
- The parent document's currency, if the document was created from another (for example, a credit note takes the invoice's currency).
- The customer's or supplier's preferred currency, if one is set on their record.
- Your organisation's functional currency, as the fallback.
You can still change the currency while a document is a draft (a sales invoice's currency can only be changed before it has any lines).
Exchange rates
To show foreign-currency figures in your functional currency, Sales Scribe needs an exchange rate. Rates are refreshed each night from the European Central Bank's daily reference feed — euro-based rates, from which Sales Scribe works out every currency pair. You can see the stored rates on the exchange rates page. These are indicative rates, published once a working day, so treat them as a guide and check the rate that actually applies when it matters.
The rate used is captured on the document and does not change afterwards, so your records never shift under you. On an invoice you can also override the rate if you need to match a specific rate — the invoice keeps an audit record of the rate used.
Note: if no exchange rate is available for a currency pair, Sales Scribe will stop and ask rather than guess a rate of 1:1. Make sure the rate you need is available (or enter an override).
Realised exchange gains and losses
This is the part that trips people up, so here is the plain-English version.
When you issue a foreign-currency invoice, you record the sale in your functional currency at that day's rate. When the customer pays — perhaps weeks later — the rate may have moved. The amount you actually receive, converted to your functional currency, may be slightly more or less than the amount you originally booked. That difference is a realised exchange gain (if it moved in your favour) or a realised exchange loss (if it moved against you).
Sales Scribe calculates this automatically when a foreign-currency payment is allocated to an invoice, and records it to your Realised FX Gain or Realised FX Loss account.
A short example
Your functional currency is GBP. You issue an invoice for US$1,000 when the rate is 1.25, so you book £800 of receivables.
The customer pays US$1,000 later, when the rate is 1.00 — that is £1,000 in your hands. You booked £800; you received £1,000. Sales Scribe records a realised exchange gain of £200 when you allocate the payment. Your bank goes up by £1,000, the receivable of £800 is cleared, and the £200 difference is recorded as a gain.
Had the rate moved the other way, you would receive less than you booked, and Sales Scribe would record a realised exchange loss.
This is normal and correct. It reflects the real effect of currency movement on your business; you do not need to calculate or post it yourself.
Before you trade in a foreign currency: set your FX accounts
Because realised gains and losses need somewhere to be recorded, Sales Scribe needs a Realised FX Gain account and a Realised FX Loss account set in Settings → Accounting. When you save your accounting settings after trading in a non-functional currency, Sales Scribe will fill these in automatically if it can find suitable accounts, or ask you to choose them if it cannot. Allocating a foreign-currency payment will not complete until they are set.
Rounding and minor units
Amounts are rounded to each currency's own smallest unit — two decimal places for pounds, dollars and euros; no decimal places for currencies like the Japanese yen; three for currencies like the Bahraini dinar. Sales Scribe handles this for you so totals always add up correctly in each currency.