Many businesses, including many in Zimbabwe, receive and make payments in more than one currency. Without a clear approach, records quickly become confusing: totals mix currencies, balances do not reconcile and reports are hard to interpret.
Always record the currency
Every transaction should state the currency it was actually made in. Never record amounts without a currency, and never silently convert them. The original amount and currency are the facts; any conversion is a calculation based on them.
Keep balances by currency
Track cash and account balances separately for each currency. A single combined balance hides important information, such as whether you have enough of a particular currency to pay a supplier who requires it.
Decide how you convert for reporting
For summaries that combine currencies, you need a consistent approach:
- which exchange rate source you use;
- which date’s rate applies, such as the transaction date or month-end;
- how rates are recorded so the calculation can be repeated later.
Agree this approach with your accountant and apply it consistently. Record the rate used alongside each conversion.
Separate transactions from conversions
When money is exchanged from one currency to another, record it as a transfer between currency balances, including any fees, rather than as income or expense.
Price and invoice clearly
State the currency clearly on quotations, invoices and receipts. Where prices are linked to another currency, explain the basis so customers understand what they will pay.
Reconcile each currency
Reconcile records for each currency against the corresponding bank, mobile money or cash records. Mismatches are much easier to find when currencies are kept separate.
Report with clarity
Reports should show amounts by currency, and, where combined totals are needed, state the conversion approach used. This prevents decisions based on totals that are not directly comparable.
Take professional advice
Currency rules, tax treatment and reporting requirements can be complex and may change. This article describes general record-keeping practice; consult a qualified accountant for guidance specific to your business.
