How foreign currency transactions are recorded in Wave

Difference between business, account, and transaction currency

Types of foreign currency transactions

Difference between business, account, and transaction currency

Business currency

This is the currency your business operates in and is chosen when setting up your
business in Wave. All of your financial reports use your business currency. To confirm your
business currency:

1. Click your business name in the top right corner.
2. Click Business settings.
3. From the Settings menu, click Dates & Currency.

Your business currency cannot be modified once you set up your business.

Account currency

This is the currency of an asset or liability account and reflects the currency of your bank account. If you set up an asset account to track physical cash, make sure to choose the correct cash currency. Set the currency of an asset or liability account when you add a new account to your Chart of Accounts.

Transaction currency

The currency of a transaction may change depending on the account the transaction belongs to. The Account manually chosen for the transaction, or the account on the bank statement upload or auto-import determines its currency.

Types of foreign currency transactions

Purchases in a foreign currency

When a purchase is made in a foreign currency using a card in your business currency, the transaction in Wave should represent the amount spent in your business currency, not the total in the foreign currency.

If you automatically import your transactions or upload a bank statement, the foreign currency purchase is recorded in your business currency. If you manually create the transaction, keep the currency the same as your business.

Deposits or withdrawals in a foreign currency account

You may have bank accounts in foreign currencies to use when working with vendors or clients in other countries. To record a deposit or withdrawal:

1. From your Transactions page, create the income or expense transaction.
2. For the Account, select the foreign currency account. The currency will
   automatically update.
3. For the Amount, enter the total amount of the deposit or withdrawal.
4. Fill out any other relevant information, then click Save.

Wave uses the xe.com rate to approximate the value of this transaction in your business currency for reports.

Foreign currency withdrawals from your business currency account

When traveling, you may use an ATM to withdraw foreign currency from your bank account that's in your business currency.

This transaction should be recorded in Wave in your business currency as it appears on your bank statement.

To bookkeep your withdrawal, create a foreign currency cash on hand account in your Chart of Accounts. Categorize the transaction as a transfer from your business currency account to the foreign currency cash on hand account. Learn how to Account for transfers from a foreign currency bank account.

If you manage cash in multiple currencies, learn to bookkeep petty cash.