Using multiple currencies with Budgets Get Real
Budgets GetReal does not incorporate a multiple-currency feature as implemented in some accounting programs. This is a deliberate design to maintain the simplicity of the program.
Nevertheless Budgets GetReal can handle a wide range of multiple-currency situations simply, without the unneeded complexities of larger accounting systems. There are two major strategies available:
1. Keep a separate database for each currency.
Within this database you can maintain and report on multiple financial entities, if required. Since all transactions are within the one currency, there is no need to continually maintain or enter exchange rates.
Transfers between accounts in different currencies will show correctly, converted in their respective bank statements.
2. Use the Business Pack with multiple financial entities.
For each currency you will:
- Setup the appropriate Accounts for each currency.
- Define at least one financial entity for each currency. All transactions in a foreign currency must be identified by a Job code. This means that you can report Profit & Loss and Balance Sheet, by each currency, and jobs within that currency.
- Define a separate set of categories for each currency. You can arrange within category headers by currency, and clearly name each category to incorporate the currency symbol. This will ensure the correct categories are used, and immediately reveal any abnormality in the reports.
- Ensure that all categories have the correct default BizCodes defined, if BizCodes are being used.
Note that it is possible to use the GST/BAS reporting structure with multiple currencies. You simply need to define separate sets of BizCodes and Code Groupings for each currency.
The definition of separate categories for each currency is very important. This means that transactions remain within the one currency, and no exchange rate conversions are required. Budgeting also remains unaffected since it is derived from the same structure of Categories, Jobs and Accounts.
Using average exchange rates
The above methods of using Budgets GetReal are most appropriate where an average exchange rate conversion between currencies is adequate for preparing yearly tax returns or you are required to produce separate tax return in each currency.
In these cases there is no need to track the exchange rate variation on individual transactions.
For most cases use of an average exchange rate is adequate. Australian taxpayers should also view the guide Australian tax payers & multiple currency transactions. This provides references to the Australian Tax Office site and outlines whether average exchange rates are usable. The ATO also publishes average exchange rates that can be used for varying time periods and for a range of currencies.
A typical example
A typical example where Budgets GetReal can simply calculate taxation obligations, in several countries is where overseas income producing property is concerned is as follows. The following is an example of how one of our customers is using Budgets GetReal.
The couple are from New Zealand now, working and living in Australia. Last year they worked part of the year in New Zealand and part in Australia. In addition, there is a business operating jointly in Australia and New Zealand.
They have bank accounts in both Australia and New Zealand. They own a property in New Zealand, on which there is a mortgage, and from which they receive rental income. They are required to file tax returns, in both New Zealand and in Australia.
The solution with Budgets GetReal was simple using either of the two methods outlined above. They chose to use the Small Business Pack with two financial entities - one for their Australian tax return and the other for their New Zealand tax return.
Initially the couple trialed Budgets GetReal using the Personal Edition by allocating Job codes to all transactions. This allowed direct upgrade to the multi-entity reporting features within Business Pack. They also established separate categories for transactions from Australia and New Zealand.
