Intermediate
How to configure currency settings on Xero
Quick Answer
Configure currency settings in Xero by navigating to Settings > General Settings > Features, enabling multicurrency if needed, then managing currencies and exchange rates. You can set your base currency, add foreign currencies, and configure automatic or manual exchange rate updates.
Prerequisites
- Active Xero subscription
- Administrator access to your Xero organization
- Understanding of your business currency requirements
- Knowledge of exchange rate preferences
1
Access General Settings
Log into your Xero account and click on Settings in the top navigation menu. Select General Settings from the dropdown menu to access your organization's configuration options.
Tip
Ensure you're logged in as an administrator or have the appropriate permissions to modify organization settings.
2
Navigate to Currency Features
In the General Settings page, click on Features from the left sidebar menu. Scroll down to find the Multicurrency section where you can enable or disable multicurrency functionality for your organization.
Tip
Enabling multicurrency cannot be undone, so ensure your business requires this feature before activating it.
3
Enable Multicurrency (if required)
If you need to work with multiple currencies, click the Turn On button next to Multicurrency. Read the warning message carefully and click Yes, turn on multicurrency to confirm. This will allow you to create invoices, bills, and transactions in foreign currencies.
Tip
Once multicurrency is enabled, your reporting will include currency conversion options and foreign exchange gain/loss tracking.
4
Set Your Base Currency
Navigate to Settings > General Settings > Organization Settings. In the Base Currency field, select your primary business currency from the dropdown menu. Click Save to apply the changes.
Tip
Your base currency should match your primary business location and cannot be changed once transactions are recorded.
5
Add Foreign Currencies
Go to Settings > General Settings > Currencies. Click Add Currency and select the currencies you need from the list. Choose whether to use Automatic or Manual exchange rates for each currency, then click Add.
Tip
Automatic rates update daily from Xero's exchange rate provider, while manual rates require you to input rates yourself.
6
Configure Exchange Rate Settings
In the Currencies page, click on any currency to modify its settings. Set your preferred Exchange Rate Type (Buy, Sell, or Mid rates) and configure Rounding Rules for currency calculations. Click Save to apply your preferences.
Tip
Mid rates are typically used for general transactions, while buy/sell rates are more appropriate for foreign exchange trading businesses.
7
Set Default Currency for New Contacts
Navigate to Settings > General Settings > Invoice Settings. In the Default Currency section, select which currency should be automatically assigned to new customers and suppliers. Choose Base Currency or Ask me each time.
Tip
Setting this to 'Ask me each time' gives you more control but requires manual selection for every new contact.
8
Test Currency Configuration
Create a test invoice or bill using a foreign currency to verify your settings work correctly. Check that exchange rates are applied properly and that the currency formatting displays as expected. Review the Currency Summary report to confirm multicurrency tracking is functioning.
Tip
Always test with a small transaction first to ensure your currency settings meet your business requirements before processing live transactions.
Troubleshooting
Cannot find multicurrency option in Features
Ensure you have administrator access to your Xero organization. Multicurrency may not be available in some older Xero subscription plans - check your plan details or contact Xero support.
Exchange rates not updating automatically
Verify your internet connection and check that Automatic exchange rates is selected for each currency. If rates still don't update, manually refresh them by going to Settings > Currencies and clicking Update Rates.
Base currency shows as incorrect in reports
The base currency cannot be changed once transactions are recorded. If you need to change it, you'll need to start a new Xero organization or contact Xero support for migration options.
Foreign currency transactions showing wrong amounts
Check your exchange rate settings and ensure the correct rate type (Buy/Sell/Mid) is selected. Verify that the exchange rate date matches your transaction date, and consider using manual rates for more control over conversions.
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