Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
The ecommerce industry is a great place to grow your inventory business. Imagine being able to sell overseas while you, the business owner, comfortably sit in your headquarters. It's an amazing opportunity for many, but it is also a tricky one.
In what way does it become tricky? The ecommerce landscape can be difficult to navigate, especially when there are so many new currencies, regulations, and tax laws on the horizon. One particular aspect of your business will be more challenging than it used to be: accounting.
Multi-currency ecommerce accounting is a topic that scares many entrepreneurs. There are so many things to consider, and the prospect of financial ruin is always looming over them. But you don't have to feel that way! This article will walk you through the basics of multi-currency accounting so that you can go slowly but surely.
Driving Down the Multi-Currency Lane: The Basics of Multi-Currency Accounting in the Ecommerce World
One of the most important things you need to know about ecommerce accounting is how it works with multi-currency transactions. If you're new to the ecommerce system, it won't be easy to take everything in. So let this article help you with a quick discussion.
First Stop: Multiple Currencies as the Biggest Challenge for Ecommerce Businesses
Let's say your company is based in the US, but you get product supplies from China and sell them to European clients. As you can guess, this will involve three currencies: USD, RMB, and EUR. Consequently, the following (but are not limited to) challenges may arise:
- Your European client or Chinese supplier will ask for an invoice in their respective currencies. Meanwhile, you need to record the income in USD as well.
- Overseas customers shopping on your ecommerce site need to see the product pricing in their respective currencies.
- Dealing and integrating with various payment getaways into your ecommerce platform can be confusing.
- Complying with various ecommerce marketplace taxes like the Amazon tax rate can be challenging. You'll find yourself asking for things such as "how much tax do I have to pay on Amazon or Shopify?"
There are just too many things involved when dealing with foreign transactions. You can't simply calculate all the costs and generate a receipt in USD for these reasons.

Second Stop: How Does it Affect Bookkeeping and Accounting?
Foreign transactions involve money more than anything else, affecting your bookkeeping and accounting operations the most. Here are specific processes that become more complicated and time-consuming with the involvement of multi-currency:
- Converting of local and foreign currency
- Incorporating the right sales value of international orders
- Translating multiple currency values into a single currency for reporting
- Accounting for assets (e.g., liabilities and monetary assets) which values change when the exchange rate does
- Filing payment and other financial reports to the government where you need details of the currency received from international clients
- Reconciling the ledger balance, which needs bank transactions outlined in relevant currencies
- Tracking foreign exchange gain or loss when money transfers (one bank account to another from different countries).
Third Stop: Overcoming Foreign Currency Challenges With a Multi-Currency Account
Suppose your ecommerce business deals with multiple currencies. In that case, you have to find a way to avoid getting confused and making mistakes. Luckily, some ecommerce platforms or accounting software offer the solution to your multi-currency dilemma: creating a multi-currency account.
What Is a Multi-Currency Account and How Does It Benefit Your Accounting?
A multi-currency account is a single bank account that allows the holding, payment, and receiving of multiple money currencies. If you're selling internationally, this is a great advantage to reduce the hassle of complex rates.
Here's how it makes your business' financial operations easier when dealing with foreign payments:
- Using only one bank account for all currencies
- Spending less time with reconciliations
- Fewer accounting adjustments involving different exchange rates
- Avoid paying for foreign exchange commissions
- Transferring money easily
Fourth Stop: What is the Basic Process of Multi-Currency Accounting?
Now that you understand its necessity, here's a basic overview of creating a multi-currency account. Take note that the process may differ per platform or software. Below is a general step-by-step procedure to give you a gist:
- Register an account to the specific platform.
- Determine the currencies and conversation rates you want to use.
- Define and set the main currency for your business transactions.
- Verify your account by complying with the requirements advised by the provider.
- Enter period rates, historical rates, and daily rates for translation and conversion.
- Update your rates regularly and post journals to update your account balances.

Bonus Stop: How to Setup a Multi-Currency Account using OFX
OFX is an example of an excellent international money transfer platform. The good thing about OFX is that it doesn't charge transfer fees and offers reasonable rates than its competitors.
In addition, it supports 55 currencies and takes up 1-5 days of transferring, depending on the location. Unfortunately, it doesn't accept same-day transfers.
Here's an overview of how you can set up a multi-currency account on this platform:
- Register and fill in the important details.
- Complete registration via call. OFX will set up an appointment with you to ask basic and necessary questions (.e.g, currencies and rates you prefer to use)
- Verify your account. OFX will request some documents and lead you to the Secure Site, where you must directly send the required documents.
- Wait for the approval and opening of your global currency account within four business days.
Organize Foreign Currencies With Unloop's Bookkeeping Services
The world is rapidly moving to digital reliance, and ecommerce is running in full force. Hence, businesses have to ensure that their financial management system supports and adapts multi-currency accounting. Otherwise, you're going to have a hard time dealing with the overwhelming complexity of foreign rates.
Before it gets to that, learn how to get financially native in foreign lands. Now, we understand that this could be a lot of information to take in. But don't fret; Unloop can extend a hand to help you organize foreign currencies.
Whether you need bookkeeping in Calgary or other Canadian areas and across the US, Unloop can help ease your bookkeeping management duties through a remote setting. We're ready to be your long-term business partner and help you with your bookkeeping tasks, such as calculating COGS and dealing with Shopify and Amazon corporate tax rates.
Want to know more about tax rates for Amazon or the difference between financial experts (e.g., accountant vs. financial reporting analyst)? Explore our blog section for more resources.