Foreign currency bills, invoices, quotes and purchase orders
You can enter sales invoices, quotes, bills and purchase orders in Xero in your base currency (the country your organisation belongs to), or in other currencies if you have set these up for your organisation.
Foreign currency invoices and payments (2:50)
Adding and viewing invoices, quotes, bills, credit notes and purchase orders
The following additional fields and information are available when entering invoices, quotes, bills, credit notes and purchase orders that are not in your base currency (i.e. you have chosen to use the multi-currency option and want to create an invoice, bill or purchase order in a foreign currency). Otherwise, follow our help for adding them:
- Add a sales invoice
- Create a quote
- Add a bill
- Repeating invoices or bills
- Add a sales credit note or credit a sales invoice
- Add a credit note for a bill or credit a bill
- Create a purchase order
Choose the currency for the invoice, quote, bill, credit note or purchase order
- The currency displayed will be your base currency by default, and you can change this to another currency you've chosen to use in your organisation.
- If you copy an invoice, copy a bill, or copy a quote, it will be in the same currency as the original one but no rate will display until you've selected a date.
- If you have entered a sales invoice, quote, bill, credit note or purchase order for a Contact before, when you select their name the currency field will automatically change to the default currency saved for them.
- If a currency you want to use is not available, use the +Add Currency option in the drop-down list. This will take you to the Currency screen to add a new currency.
- If you are adding a new credit note, rather than crediting a specific invoice or bill, you can choose the currency for the credit note. However, if you are crediting a specific invoice or bill (i.e. using the Add Credit Note option on the Invoice Options or Bill Options button), the credit note will automatically be in the same currency as the invoice or bill. If you are processing an existing credit, you can only allocate the credit to an invoice or bill in the same currency.
To allow a customer to pay online, at least two of the following must match: bank account currency, invoice currency, and base currency. If you're using Authorize.Net or eWAY, the invoice currency must also match the payment service currency.
Exchange rate on the invoice, quote, bill, credit note or purchase order
- The exchange rate used on the sales invoice, quote, bill, credit note or purchase order will be the rate on the invoice, quote, bill, credit note or purchase order date i.e. the 'Date' field or the closest rate to that date if one doesn't exist for the date entered.
- Use the Exchange Rates link to edit the rate.
- If you change the rate on an invoice, quote, bill, credit note or purchase order, you can choose for the change to be for just this item, or to set a new rate for the day.
- There must be a rate present in Xero for the date of the invoice, quote, bill, credit note or purchase order before it can be approved.
- Exchange rates are received into Xero every hour, so the rate used on an invoice, bill or purchase order saved in draft in the morning might be different to the rate later in the day. Edit the exchange rate and choose or re-save the XE.com rate if you want to approve the invoice, quote, bill or purchase order at the latest rate - otherwise the original rate when the invoice, quote, bill or purchase order was raised will be used. Any difference between the original rate on the invoice or bill and the actual rate at the time you approved it, will display on the approved invoice or bill as a gain or loss.
- If you have set up repeating invoices or bills to be automatically approved, there must be an exchange rate for the date of it before it can be saved as approved. If an exchange rate is not available for the repeating invoice or bill date, it will be generated using the closest available rate to the invoice or bill date.
- If you are overriding the XE.com exchange rates on a daily basis, you should set up only draft repeating invoices or bills so that you can manually edit the rate used before approving it. Rates you enter yourself are only valid for one day and at midnight at the start of the next day, the XE.com rate will be used until you enter the new day's rate yourself. Repeating invoices or bills are also generated at midnight at the start of the date on them, so will use the XE.com rate for the new day. Invoices or bills that have been automatically approved cannot have the exchange rate edited.
You can use inventory items on sales invoices, quotes, bills, credit notes and purchase orders in other currencies. However, as an inventory item can only have one unit price for sales and one unit price for bills and purchase orders, it is this price that will be used on the invoice, bill or purchase order and it will be in whatever currency the invoice, quote, bill or purchase order is in.
- Inventory items added to the Inventory Item screen (Accounts > Inventory) don't have a currency shown but will be treated as if in your base currency. The price and tax rate you use on the inventory item might be determined by which currency you generally use for the item.
- After choosing the item on an invoice, quote, bill, credit note or purchase order, you can adjust the price and tax rate (if applicable) to be relevant to the currency you're invoicing or billing in. If you leave the item at the pre-determined price, the invoice, quote, bill, credit note or purchase order will be at that price in the currency chosen, and converted to your base currency for viewing and reporting.
- Run the Sales by Item report to show the sales of these items in your base currency or broken out by currency if you've used untracked inventory items on foreign currency invoices or bills.
- Run the Inventory Items Summary to show both the sales and purchases of your untracked inventory items.
Sales tax on invoices or bills
The tax rules of your region will determine how and if you should include sales tax on your sales invoices, quotes, bills, credit notes or purchase orders when they are in another currency. This is usually to do with where your customer or supplier resides for tax purposes.
- Invoices, quotes, bills, credit notes and purchase orders will have sales tax appropriate to your organisation and country displayed by default regardless of the currency you choose for the item.
- You can change the invoice, quote, bill, credit note or purchase order amounts to be Tax Exclusive, Tax Inclusive or show No Tax and you can change the default tax rate for the account you've chosen to be a rate that doesn't attract tax as appropriate for your tax rules.
- Sales tax on items you've purchased in another currency will depend on what is on the bill or credit note from your supplier. Sometimes tax might be included on it, other times on a separate bill or credit note from a customs or freight source.
- If your transaction contains a sales tax amount that is 100% refundable then you should use Xero's system account VAT with the tax rate VAT on Imports to code this amount to - amounts coded as such will be carried through and reported on your VAT Return and included in your overall amounts to be refunded or paid. Refer to How do I use the GST on Import tax rate? for a full explanation.
- Depending on your country and how your organisation is set up there may be a range of tax rates you can use in Xero (e.g. No VAT,Zero Rated,Exempt or other rates you may have set up yourself) and each rate is treated differently for the purposes of your Sales Tax Return. Your tax reporting requirements will determine whether the whole bill, invoice or credit note is to be included in your sales or purchases figures, regardless of whether it has sales tax on it or not. Refer to How does the VAT Return work? to see how sales tax is recorded and reported in Xero.
- If there is any sales tax on an item, it is recorded on the transaction and included in reports on the date of the transaction at the rate on that date. The value of invoices, bills and credit notes might rise and fall depending on currency fluctuations (gains and losses) but the sales tax amount will remain static.
- If you have particular customers or suppliers that you always transact with in a foreign currency, the easiest way to manage this is to edit their Contact details and enter a default currency and sales tax rate that will always be used when you enter an invoice, quote, bill, credit note or purchase order for them.
- The calculation of sales tax amounts for your Return in Xero are still determined by the tax rate used on a transaction, regardless of its currency.
- If you do include sales tax on an invoice, quote, bill, credit note or purchase order that's in another currency, the tax amount will be calculated and displayed in the currency of the item. Wherever the tax amount is converted to your base currency it will be done so using the exchange rate on the date of the invoice or bill e.g. on PDF invoices.
Foreign currency sales invoice PDFs show the full breakdown of tax rates applied in local currency.
View invoices or bills
Find out more about when footnotes or currency symbols/markers are used
Balances and amounts throughout Xero that are displayed in a foreign currency or contain foreign currency amounts have footnotes or currency markers next to them that you can click or hover over to see amounts in their original currency or the revaluation to your base currency. Your user role will determine where you are able to view invoices, quote, bills, credit notes and purchaser orders from.
In the case of sales invoices, quotes, bills, credit notes and purchase orders, these are sometimes shown in their own currency, and sometimes revalued to your base currency depending on where they are displayed.
- On the invoice, quote, bill or purchase order itself, whether being viewed in Xero or as a PDF, it will be shown in its original currency.
- PDF invoices or bills will use the default display showing the currency in the column heading above the invoice, quote, bill or purchase order details, and a line for your local sales tax even if this is 0.00 and hasn't been applied to the foreign currency invoice, bill or purchase order. If you have customised your branding theme (Invoice Settings) to add or remove elements on the sales invoice, it may look different. You cannot remove the 0.00 sales tax line item. The total of the sales invoice will always display in the currency it was raised in.
- Approved invoices, bills and credit notes (i.e. those with a status of awaiting payment or paid) will display gains or losses made on the invoice or bill.
- If you're looking at your Sales or Purchases dashboard, or these sections on the main dashboard, all totals and graphs will be shown revalued to your base currency (as at today's rate). Drill down into specific totals to see how these are made up and in which currencies.
- When invoices, bills and credit notes are displayed in lists in Sales and Purchases, they will appear in their original currency. A currency marker will show the currency and you can click or hover over to see the invoice, bill or credit note or overall totals revalued to your base currency at today's rate.
- Reports that include invoice, bill or credit note totals will be in your base currency with any amounts in a foreign currency revalued at today's rate. Footnotes will be used to provide details of items in other currencies and the exchange rate used. Find out about how reports show foreign currency amounts.
A list of customer statements is generated for a period from Sales. You can view a particular customer's statement from their contact details, by clicking on their statement in the list or by clicking on the amount they owe on the Sales dashboard. Items on a customer's statement will be grouped by currency if you've used other currencies.
- View, email or print a customer statement
- View, email or print multiple customer statements
- View, email or print a customer statement
View a statement containing more than one currency
If a customer statement contains items in more than one currency, items will be grouped by currency.
On screen, each currency block lists all the items in that currency.
Drill down into individual items in a foreign currency for specific exchange rate or revaluation information.
On the PDF version of the statement, each group of items in a different currency is on a separate page.
View a list of statements containing more than one currency
The list of statements shows footnotes next to items that contain foreign currency items.
A footnote is used if one or more or all items on the statement are in a currency other than your base currency.
The footnote details the number of items in each foreign currency, items in your base currency are not noted.
If items are all in your base currency, no footnote will display.
The balance displayed will be in your base currency with foreign currency amounts already converted at at today's rate.
When you drill into each customer's individual statement, items will be shown in their own currency.
Invoice or bill payments & cash refunds
Make a payment on an invoice or bill, or a refund on a credit note by entering the amount in the currency of the sales invoice, bill or credit note and choosing which bank account the payment is going into or coming out of.
- Payments can only be entered in the invoice or bill currency.
- The payment can be from a bank account of the same currency as the invoice or bill, or from a bank account in your base currency.
Payment/refund is in your base currency
If the payment is in your base currency, that is, a foreign currency amount was received into/paid from your base currency account and therefore converted to your base currency:
- You can only record an accurate payment for the invoice or bill once the payment has gone through your bank account and you have the details of the foreign currency transaction from your bank.
- From the payment details provided by your bank, enter the foreign currency amount paid, the rate at which the bank converted the payment to your base currency and the bank account. As soon as you choose a bank account for the payment that is in a different currency to the invoice or bill, an extra exchange rate field will be displayed. From the 'Paid To' field you can only choose a bank account in the same currency as the invoice or bill or a bank account in your own base currency. Other accounts in your chart of accounts that are not bank accounts but are enabled for payments will use your base currency as well (e.g. 'Owner Funds Introduced').
- The exchange rate to be entered is not necessarily today's rate and is not the rate in Xero. It is the rate used by your bank to process the foreign currency payment.
- If your bank has taken a fee for processing the foreign currency transaction you will need to record this as a spend money transaction in the same currency bank account as the payment has been processed in. The fee needs to be recorded separately and you shouldn't deduct it from the invoice or bill payment.
- The payment converted to your base currency will display in your base currency bank account. You can click into the payment to see the foreign currency amount paid, the exchange rate used and the converted amount.
Reconciling base currency payments for foreign currency invoices or bills
The exchange rate is automatically calculated based on the bank statement line amount and the amount of the invoice or bill.
Reconciling foreign currency payments for base currency invoices or bills
Reconciling foreign currency invoices or bills paid in a different foreign currency
Gains and losses shown on invoices, bills and credit notes
Gains and losses are made on transactions, due to currency fluctuations between the time you entered a foreign currency sales invoice, bill or credit note and the time payment or refund was made. Gains and losses do not appear on bank account transactions - any transactions in your foreign currency bank account happen on a certain day at a certain rate and are not therefore not subjected to exchange rate fluctuations.
Unrealised and realised gains and losses are run through the foreign currency system accounts 'Unrealised Currency Gains' and 'Realised Currency Gains' in your chart of accounts.
The following gain and or loss information will be shown on foreign currency invoices, bills and credit notes.
- The original exchange rate on the date of the invoice, bill or credit note is shown.
- Gains or losses are shown as green or red arrows and figures are in your base currency.
- When invoices, bills or credit notes have a status of Awaiting Payment, an 'unrealised' gain or loss figure will display. It will show the difference in what the invoice, bill or credit note is worth at today's exchange rate versus the date of it based on the difference in the exchange rate during that time.
- When invoices, bills or credit notes have a status of Paid, a 'realised' gain or loss figure will display showing the actual amount gained or lost on the invoice or bill due to the change in the exchange rate by the time the payment or refund was made.
- Gains and losses are displayed as 'Realised' or 'Unrealised' figures depending on whether the invoice or bill is fully paid.
- The 'Realised' figure will display the actual gain or loss once the invoice or bill has been paid or refund issued on a credit note i.e. the gain or loss has been made, it's therefore 'realised'.
- The 'Unrealised' figure will display the calculated gain or loss as at today's exchange rate i.e. if the invoice or bill is paid or refund issued on a credit note, the difference in what this is worth to you today versus the date of the invoice, bill or credit note.
- The 'Net' figure will display the net amount actually gained or lost on the bill or invoice - it will be the same as the realised or unrealised amount depending on whether the invoice or bill has been paid, or will show you the difference between the 2 if the invoice, bill or credit note has been partly paid.
- If the date of the credit note, bill or invoice is today, the gain or loss is likely to be 0.00 because if payment was made or received today it would be at the same exchange rate. However, if you enter a payment at a different exchange rate (payment is received in another currency) then a gain or loss will show on the paid invoice or bill.
- A gain or loss will immediately display when an invoice or bill is approved if it has been sitting as draft or awaiting approval for a while at a different rate than the time you approved it.
- A credit note in a foreign currency applied to an invoice or bill will also show a gain or loss figure on the credit note if the exchange rate is different on the 2 items.
- If invoices, bills or credit notes are paid or refunded in parts, a gain or loss is calculated on each payment using the exchange rate on the day of the payment, with the total net gain or loss being the total realised amount for each payment.
- Gain/loss information doesn't show on unapproved items (i.e. Draft, Awaiting Approval), items that have been deleted or voided, or items in your base currency. Even if you entered an invoice, bill or credit note, your user role may not allow you to view gain/loss information.
Reports showing gains & losses
You can run a report showing foreign exchange movements that allows you to drill down to view specific realised and unrealised gains and looses:
Xero to Xero invoices or bills, or invoices from apps
If you are set up to send or receive sales invoices or bills to or from your customers and suppliers who are also using Xero, you can do this whether one or both of you have the multi-currency option enabled.
Invoice or bill amounts are essentially just sent as numbers from Xero to Xero - here's what will happen if both or only one of you is sending or receiving a foreign currency invoice or bill.
The invoice or bill is sent from Xero to Xero in the currency of the invoice or bill. It is received as that amount in either the same currency or the recipient's base currency depending on the currency(s) they're using:
- If both organisations have same base currency, the invoice or bill will be for the same amount (and will match the PDF invoice sent) and can be processed by the recipient as normal.
- If both organisations are using the multi-currency option and the recipient has the currency of the invoice or bill loaded as a currency they use, it will be received in that currency for the same amount (and will match the PDF invoice or bill sent). Once approved by the recipient, the gain/loss information on the invoice or bill will be relevant to the exchange rate being used by that organisation. The amount of the invoice or bill and the payment made or received for it won't change. It's the same if the invoice or bill in a foreign currency is sent to an organisation where that currency is the recipient's base currency or if the sending organisation's base currency is the same as a foreign currency that the receiving organisation has loaded.
- If both organisations have the multi-currency option but the receiving organisation hasn't chosen to use the invoice or bill currency, then that currency will automatically be added to their list of currencies. This means the invoice or bill can be received and processed in that currency.
- If you send a Xero to Xero invoice or bill to an organisation without multi-currency, be aware they will receive it in their currency. This means that when processing the invoice or bill, the recipient will have to manually convert it to the amount of the foreign currency invoice or bill so that the correct payment is made.
Sending and receiving foreign currency invoices or bills via a connected app
If you're using one of the connected apps to send or receive Xero sales invoices or bills, they can be sent or received in your organisation's base currency or in the foreign currency.