If your business buys or sells in other currencies, Xero makes it easy to handle them. With Xero’s multi-currency feature, you can:

Before You Start (Requirements)

You’ll need to add a new currency before you can use it for invoices or bank accounts.

Step 1: On your dashboard, click the Accounting menu. Click the Settings icon (⚙️).

Step 2: Scroll down until you see the Accounting section and select Currencies.

Step 3: Click Add Currency.

Step 4: Choose the currency you want (e.g. USD, SGD, EUR) and click Add Currency to confirm.

Tip: You can add as many currencies as you like. You can’t delete a currency once added, but you can make it inactive later.

Xero automatically updates exchange rates every hour using data from XE.com, so you usually don’t have to do anything. However, you can view or change a rate if needed.

Step 1: On your dashboard, click the Accounting menu. Click the Settings icon (⚙️).

Step 2: Scroll down until you see the Accounting section and select Currencies.

Step 3: You will see a list of currencies added to your Xero account, along with their current exchange rates beside them.

In this example, if your base currency is USD, Xero will display the exchange rate between USD and the selected foreign currency.

To view exchange rates for a different date, simply change the date at the top of the screen. Xero will display the exchange rate used on that specific day, which is useful for reviewing older transactions.

If your business holds a bank account in another currency, you can add it in Xero to record transactions accurately and track balances in that currency.

Step 1: On your dashboard, click the Accounting menu. Click the Bank accounts.

Step 2: On the top right, click Add Bank Account.

Step 3: Search for your bank name and select it from the drop-down list. The country will be filled up automatically based on the country you set upon creation of Xero accounts.

If your bank is not listed, add it manually by clicking Without Bank Feeds on the top right.

Step 4: Enter your bank account name and details. Under Currency, choose the right one (e.g. SGD)

Step 5: Click Save & Continue or Add account (if using without bank feeds).

⚠️ Note: You can’t change a bank account’s currency later. If you picked the wrong one, delete and re-create it.

If you sell to customers in other countries, Xero allows you to issue invoices in their local currency. You can either select the currency directly when creating the invoice or set a default currency for each customer.

Step 1: On your dashboard, click Sales and choose Invoices.

Step 2: Create the Invoices and enter your normal invoice details.

Step 3: Under the Currency field, choose the desired currency (e.g., USD, SGD, EUR).

Step 4: Click Approve and Send.

Step 1: On your dashboard, click Contact or Sales and choose Customers.

Step 2: Search and click on the customer’s name.

Step 3: Click Financial details and click Edit.

Step 4: Choose their default currency (e.g. SGD) and click save.

Step 5: Create the Invoice. When you create a new invoice for this customer, Xero will automatically use their assigned currency.

Step 1: Open the sales invoice and click Set exchange rate shown under the currency.

Step 2: Replace it with your own rate (for example, from your bank) and click Save.

Tip: A manual rate only applies to that one transaction and won’t change your other records.

If you receive supplier bills in other currencies, Xero lets you record and manage them easily in your suppliers’ local currency.

You can either select the currency directly when creating the bill or assign a default currency for each supplier.

Choose Currency Directly When Creating a Bill

Step 1: On your dashboard, click Purchases and choose Bills.

Step 2: Create the Invoices and enter your normal invoice details.

Step 3: Under the From field, choose the desired currency (e.g., USD, SGD, EUR) and click Approve to record the bill.

Tip: Once the bill is paid, Xero will automatically calculate any realised foreign exchange gain or loss based on the payment date’s rate.

If you frequently receive bills from the same supplier in one currency, you can set that as their default currency.

Step 1: On your dashboard, click Contact or Purchases and choose Suppliers.

Step 2: Search and click on the supplier’s name.

Step 3: Click Financial Details and click Edit.

Step 4: Choose their Default Currency (e.g. SGD) and click Save.

Step 5: Create a new bill for this supplier. Xero will automatically use their assigned currency the next time you create a bill.

Step 1: Open the bill and click Exchange Rate shown under From field.

Step 2: Replace it with your own rate (for example, from your bank) and click Save.

Tips: A manual exchange rate only applies to that one transaction — it won’t affect other bills or your system’s default rates.

If your business deals in multiple currencies, Xero automatically tracks the effects of exchange rate changes on your invoices, bills, and bank accounts. Whenever you record a transaction in a foreign currency, Xero converts it into your base currency (e.g., MYR) using the exchange rate on that day.

If the exchange rate changes before or once you make or receive payment, the value of that transaction (in your base currency) changes too — resulting in a gain or loss. These differences appear as realised or unrealised foreign currency gains and losses.

A realised foreign exchange gain or loss occurs when the actual payment is made and the exchange rate on that day differs from the rate on the transaction date.

When you:

The difference between the two is automatically recognised as a realised gain or loss.

Example:

Unrealised gains and losses are the potential changes in value for unpaid foreign currency invoices or bills based on the current exchange rate. They reflect what would happen if the transaction were settled today.

When you run the Foreign Currency Gains and Losses report:

Step 1: On your dashboard, click Reporting and choose All Reports.

Step 2: Scroll down until you see the Taxes and balances section and select Foreign Currency Gains and Losses.

Step 3: Choose your report date (e.g., month-end).and click Update.

Xero automatically posts any realised and unrealised gains or losses. This means you don’t need to manually adjust your accounts — Xero tracks these changes for you when invoices, bills, or payments in foreign currency are settled.

What Each Column Means

You can click on each line in the report (for example, a line under Accounts Receivable or Bank Accounts) to view the detailed transactions behind those numbers. This lets you see:

Tip: Xero doesn’t post unrealised gains/losses to your accounts automatically. They’re for reporting and valuation purposes only. Once the transaction is paid, the unrealised amount becomes realised.

In Xero, your base currency is determined by the country you selected when setting up your organisation.

Once your Xero account has been created, the base currency can’t be changed, it’s permanently tied to that country’s currency setting.

If you need to work in a different currency, the best option is to:

Tip: Before setting up a new organisation, double-check your business location and reporting currency to ensure it aligns with your financial needs.

Q: How to Change Base Currency in Xero?

A: No. Once your base currency is set (e.g. MYR), it cannot be changed. If you need a different base currency, you would need to create a new Xero organisation.

Q: Why is the FX Exposure showing zero?

A: You may not have any open foreign currency balances, or exchange rates didn’t change during your selected period.

Q: How do I fix the wrong currency on a bank account?

A: You can’t change it. You must delete and re-add the account with the correct currency.

Q: My report shows no gains or losses — is this an error?

A: Not necessarily. This can happen if no foreign currency transactions were settled during the period or Exchange rates remained unchanged

Handling foreign currency in Xero is straightforward once you’ve set it up correctly. With automatic exchange rates, easy invoicing in multiple currencies, and built-in gain/loss tracking, Xero helps you stay on top of international transactions.

Review your reports regularly — especially the Foreign Currency Gains and Losses report — to keep your accounts accurate and make informed financial decisions.