How to handle multi-currency in different accounting tools

Handling multiple currencies in accounting can be complex. Exchange rates fluctuate, foreign transactions need accurate recording, and not all accounting software handles multi-currency in the same way. For many businesses, this leads to manual conversions, spreadsheets, and a higher risk of errors.

Why Multi-Currency matters

Even when accounting software supports multiple currencies, transactions are often stored in both the foreign currency and the base currency, which is usually EUR. This ensures consistent reporting while allowing the system to calculate foreign exchange (FX) gains or losses.

However, not all software handles this perfectly. Some platforms provide only partial support: they may allow invoices in a foreign currency but fail to handle foreign bank accounts, track exchange rates per transaction, or automatically reconcile currency differences. In other cases, software may not support multi-currency at all, forcing users to manually convert every transaction and track FX gains or losses, creating opportunities for mistakes.

Multi-Currency in accounting software

Accounting systems vary widely in their multi-currency capabilities. Robust systems such as SAP, Xero Premium, and Netsuite allow assigning different currencies to journals, bank accounts, customers, and suppliers. These systems store both the foreign currency amount and the base currency equivalent, automatically recognizing exchange rate differences through revaluation entries and reconciling foreign bank accounts in their native currency.

Some platforms, like Pennylane, FreshBooks, and FreeAgent, offer partial support. They may allow invoices in foreign currencies but fail to handle foreign bank accounts or track exchange rates per transaction. Reconciliation is often done manually in the base currency, and users must manage currency conversion logic themselves, frequently relying on spreadsheets.

Other software has no multi-currency support at all. In these cases, the entire system operates in a single base currency, requiring manual conversion of every foreign transaction and manual tracking of FX gains and losses. This can effectively break the accounting logic for businesses operating internationally.

Even among popular software, capabilities differ. Systems like Exact Online, Netsuite, Microsoft Dynamics, QuickBooks, SAP, Odoo, Zoho Books, and Cegid offer full multi-currency in certain versions or plans. Others, such as Sage or Datev, may offer only partial support depending on setup. Platforms like Pennylane, FreshBooks, and FreeAgent do not provide multi-currency accounting functionality at all.

How Chift simplifies Multi-Currency

Chift removes the complexity by standardizing multi-currency logic across all systems. It automatically detects whether your software supports foreign currencies and adapts accordingly.

If multi-currency is supported, Chift passes the transaction in the foreign currency along with the exchange rate, letting the software handle conversions, record both currency amounts, manage reconciliation, and calculate FX gains and losses. If the software does not support multi-currency, Chift converts the amount to the base currency before entry, eliminating manual calculations and spreadsheet errors.

This means your finance team no longer has to worry about whether their accounting system fully supports foreign currencies Chift handles it for them.

Common scenarios made easy

Supplier Invoices: When booking a supplier invoice in a foreign currency, Chift ensures the transaction is correctly recorded in both currencies if supported, or converts it to the base currency if not.

Payments to Suppliers: Chift automatically records payments in the foreign currency when supported, posting any FX gains or losses. In single-currency systems, it converts the payment to the base currency and maintains accuracy without manual intervention.

Incoming Bank Transactions: Chift can post incoming or outgoing bank transactions in their original currency, keeping the base currency equivalent for reporting.

Transfers Between Bank Accounts: Even transfers between accounts in different currencies are simplified. Chift handles conversion rates, fees, and ensures the ledger remains accurate, whether the software supports multi-currency or not.

Exchange rate best practices

Accurate exchange rates are essential for compliance and correct reporting. Chift uses spot rates for invoices and bank transactions, and the actual conversion rate for transfers between accounts. Wherever possible, it relies on audited sources like the ECB or central banks. Users can also provide their own exchange rates, which Chift will apply correctly for consistent and reliable accounting.

The Chift advantage

Multi-currency accounting no longer needs to be a headache. With Chift, businesses gain confidence that all transactions are posted accurately, FX gains and losses are handled automatically, and reconciliation is simplified. Chift ensures your books stay accurate and your finance team can focus on running the business instead of chasing conversions and manual errors.

To know more about this check our technical documentation.