One client, two currencies: invoicing and getting paid in both

Keep your books in your own currency, and let each invoice carry the currency agreed with the client. Each invoice is booked at the exchange rate of its date, and each payment at the rate of its own date; the difference between the two is an exchange gain or loss, booked when the payment arrives. That way one client can have one contract in dirhams and another in euros, and both stay right.

When it happens

• A client pays the main works in your currency and imported items, such as lifts or façade systems, in euros or dollars.
• A foreign developer contracts in its own currency.
• You buy abroad in one currency and sell at home in another.

In each case the same client or supplier appears in your books in two currencies.

Five rules that keep it straight

1. One home currency for the books. Profit, the balance sheet and every report are in it.
2. Each document keeps its currency. A contract in euros is invoiced in euros and paid in euros. Do not convert halfway.
3. A rate for each date. The invoice is booked at the rate of its date; the payment at the rate of its date.
4. The difference is real. If the rate moved between invoice and payment, you gained or lost money. Book it as an exchange difference, never as a discount or a correction.
5. Statements per currency. The client sees what is owed in each currency, not a converted total that changes every day.

A worked example

Home currency: dirhams (AED). Contract B is invoiced in euros.

The client paid exactly what the invoice said, 20,000 euros. In your currency it brought in 81,000 dirhams instead of 80,000, and the 1,000 is an exchange gain, shown on its own line apart from the profit on the works.

Setting the rate

Rates move every day. Use one source and stick to it, such as your bank's rate or the central bank's, and set the rate on the days you invoice and the days you are paid. Your bank's rate is usually closest to what actually lands in your account.

Common mistakes

• Converting the invoice into your currency before sending it, while the client pays in euros: the books never match the bank.
• Booking the exchange difference as a discount or a correction.
• Using a rate from weeks ago.
• One running balance that mixes currencies.

How Sitely does it

A new Sitely workspace starts with your own currency only, so nobody picks the wrong one by accident. When you need a second currency, you switch it on and set its rate. From then on invoices, supplier bills and payments each carry their currency, and the same client can have invoices in both. Each one is booked in your currency at its date's rate, and when a payment settles an invoice at a different rate, the exchange difference is booked by itself, to the accounts your country's chart provides for it.

See what else is included on the Product page, or try two currencies on your own figures in a free 15-day trial.

Questions people ask

Which exchange rate should we use?

One source, used consistently. Your bank's rate is usually closest to the money you actually receive.

Is an exchange gain part of our profit?

Yes, but as a gain on money rather than on the works, so it sits on its own line and the margin on each contract stays clear.

Can a client pay a euro invoice in dirhams?

Yes, if you agree to it. Record the payment in dirhams against the euro invoice; any difference against the invoice's rate is still an exchange difference.