Base currency and transaction currency
You will be able to: Define base currency and transaction (document) currency; Describe which figures sit in which currency in Zeyto; Convert a foreign-currency invoice to base currency by hand.
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The base currency is the currency your books are kept in. A transaction currency is the currency written on one document, for example a USD invoice for an overseas customer. A company has one base currency and may use many transaction currencies.
In Zeyto the base currency is the Base Currency field in Settings ▸ Company Profile. Every document is posted in it. The list of currencies you can use on documents is in Settings ▸ Currencies; Zeyto already includes the world currencies, so you add one only if yours is missing.
| Figure | Currency it is held in |
|---|---|
| Invoice lines, VAT and grand total as printed | Document (transaction) currency |
| General ledger entries, VAT ledger, stock values | Base currency |
The conversion happens once, when the document is posted, using the rate on the document. The customer's invoice stays as they signed it; your ledgers stay in one currency, so every report adds up.
Rules the posting engine enforces
- A base-currency document must carry rate 1. Any other rate on it is refused.
- A rate must be greater than zero. Zeyto never assumes a missing rate is 1.
- A foreign document at rate 1 is allowed, because a currency can be pegged one for one, but it is usually a typing slip, so check it.
- Posted documents keep the rate they were booked at. Changing a rate later never changes them.
Choosing and changing the base currency
Choosing a Country in Company Profile also fills Base Currency with that country's currency, but only while Base Currency still holds the previous country's own currency. You can pick any active currency. In Settings ▸ Currencies, the button Set as base currency moves the Base tag, but posting follows the Base Currency in Company Profile, so use Company Profile.
Try it in the demo
- Open Settings ▸ Company Profile and read the Base Currency (do not save).
- Open Settings ▸ Currencies and find the row tagged Base. Look at the columns Decimals and Subunit.
- Open Sales ▸ Sales Invoice, press + New, and choose a currency other than the base. Watch the Rate box fill in. Leave without submitting.
Public demo company, sign in as admin / demoAdmin123. Data refreshes nightly.
- Books are kept in the base currency; documents can be in any active currency.
- Zeyto converts once, at posting, at the rate on the document.
- Foreign amount x rate = base amount, with the rate meaning 1 foreign unit in base.
- Set the base currency before the first document.
Check yourself
5 questions on this lesson. Not timed, not the exam, and you can try again. Score 60% or more, and read the lesson, to complete it.