Have you used the prepayments function in Xero? Pretty cool isn’t it? Did you ever notice that you can’t use this function for foreign currency transactions?
In this XU Try-It Tutorial, you can learn how to manage deposits paid in foreign currency in Xero and try it yourself.
If you are paying deposits to overseas suppliers for goods in a foreign currency, it’s often a complete headache to keep track of what you have paid already in both the foreign currency and your own base currency, how much is left to pay, when it’s due and so on. The good news is Xero makes it easy – when you know how.
Here’s the common problem that every business importing and exporting products faces – how to keep track of the money paid to the suppliers and received from customers in foreign currency and in the currency the business trades in (your base currency). It doesn’t matter whether you are using an inventory addon, like DEAR Inventory and Unleashed, or not – you still need to keep track of the money spent or received in Xero. This is usually an easy thing to do with Xero’s prepayments function but if you didn’t know already, it doesn’t work for foreign currency.
Let’s first of all see how prepayments work in your base currency…