The ultimate guide to multi-currency accounting for eCommerce

Callum Armstrong4 min 30 sec
The ultimate guide to multi-currency accounting for eCommerce
In this article

It’s no secret that eCommerce unlocks a world of opportunities.

But with those floods of new customers comes a less welcome complexity: multi-currency accounting. 

So, what’s involved? And how do you ensure you’re not paying more than you’re making overseas?

In this guide, we’ll give you the tools you need to start accounting for multiple currencies with ease and accuracy. 

Here’s what we cover in this guide to multi-currency accounting for eCommerce:

  • The challenges of multi-currency accounting for eCommerce 

  • How to account for multiple currencies 

  • How to get your free specialized eCommerce bookkeeping checklist 

The challenges of multi-currency accounting for eCommerce

Accounting for eCommerce businesses can be challenging. 

With potentially unlimited transaction volumes and complicated sales tax rules, adding multiple currencies to the equation can feel pretty overwhelming.

Shifting exchange rates (even small ones) can have a significant impact on businesses. And you might be obligated to pay other countries’ sales taxes, too. 

You want to make sure that selling overseas generates enough of a return to justify these expenses (and obligations). 

The best way to do this is through smart, automated multi-currency accounting. 

Here’s how to do it. 

How to account for multiple currencies 

Here are the steps to accurate multi-currency accounting.

1. Get cloud accounting software. 

Hopefully, you already have cloud accounting software for your eCommerce business. If not, this is step one. And that’s regardless of whether or not you sell overseas. 

Having your accounts in the cloud gives you multiple benefits:

  • Easy access to your records from anywhere in the world and at any time

  • Automatic features purpose-built for your business needs 

  • Encryption to protect your business’s sensitive information

  • The freedom to optimize aspects of your operations through apps and automations 

It will be almost impossible to account accurately for multiple currencies without proper accounting software. 

2. Choose a multi-currency payment gateway.

Payment gateways are the intermediary between your sales channel and your customer.

Airwallex, PayPal, Amazon Pay, and Google Pay are all examples of payment gateways. They make transactions quick and secure between two parties that don’t know each other. 

To accept other currencies, you’ll need a facilitating payment gateway.

The pro: They can help you avoid foreign transaction fees.

The con: Although some accept other currencies, they might convert transactions into your home currency and charge you for it. 

Fortunately, Airwallex offers a borderless payment gateway without the extra fees.

You should look for certain factors in a multi-currency payment gateway:

  • The currencies you want to be able to accept

  • That these currencies can be settled and withdrawn without fees

  • That it supports different payment formats like buy now, pay later (BNPL), sales channel integration methods, or invoicing 

  • That it’s protected using technology like 3D Secure

  • The fees associated with the gateway, which are typically charged via the Interchange++ method, or blending pricing 

    • Note: The latter is a simplified version of the former and is easier to predict.. 

Pro tip: Payment gateways can charge different rates depending on where you do business. 

It’s a good idea to offer your customers a few options for conversion, but be careful about how you account for these variations in the back end. 

3. Open a global multi-currency bank account.

If you’ve started with Airwallex, then you can skip this step. This comes with your Airwallex account.

You’ll need this specific type of account to handle the settlement of various currencies without the conversion fees.

When setting up a global account, make sure it does two things:

  • Can process all the currencies you want

  • Can exchange currencies if you want this option 

    • Note: Check the rates because these vary significantly among providers.

4. Integrate your accounts with A2X.

You need your accounts to send information freely without your input. Otherwise, it’s a full-time job. And that doesn’t leave much room for anything else.

So, the next step in multi-currency accounting is to connect your tools. 

First, you’ll need to integrate your accounting software with your bank account(s). Then, you can connect your sales channel using A2X.

A2X takes your sales channel payouts and turns them into journal summaries for your accounting software for quick and accurate reconciliation. 

Each fee, expense, credit, and debit is accurately and automatically accounted for in your accounting software, which saves you time and avoids frustrations.

Without it, you’ll spend unnecessary hours identifying the details of each transaction manually. And that job is tricky enough in your home currency. 

5. Consider a tax app for easy compliance.

Venturing overseas means opening up your business to more tax obligations. 

Sales tax is complicated enough in the US. In fact, you should be using a tax app already, even if you sell only nationally.

So adding VAT, GST, and other potential tax types to your plate should be a gradual, regulated process when possible.

It should be something you can track carefully, plan for, and manage seamlessly.

Apps like TaxJar and Avalara can help you do this. 

6. Chat with a specialist. 

Our final piece of advice is to get expert help — at least in the beginning, while you’re finding your feet — but get help in the long term if you can. 

Specialist eCommerce accountants and bookkeepers know and understand the industry, so they’ll help you make the best decisions for your business.

They’ll also be able to recommend software, apps, tax strategies, and advice for accounting for multiple currencies so that you don’t lose out. 

Who knows how much time and money they could save your business?

Download our free bookkeeping checklist for easy eCommerce accounting 

eCommerce accounting is hard, but at A2X, we’re on a mission to simplify it for sellers.

We created this specialized checklist of all the tasks you need to complete on a weekly, monthly, quarterly, and yearly basis. Using it, you can focus less on process and more on growth.

Your accounts should work for you, not hold you back.

Download your free checklist today.

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Callum Armstrong
Airwallex Guest Contributor

Callum Armstrong leads the content marketing team at A2X - running campaigns around ecommerce, accounting, and ecommerce accounting. Outside of work, he volunteers for a range of local environmental projects protecting endangered wildlife and helping with their marketing.

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