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See pricingGUIDE · MULTI-CURRENCY RECONCILIATION
Reconcile a foreign-currency bank account in its own currency first: the statement’s opening balance plus its lines must equal its closing balance, exactly as printed. Then value the closing balance at the month-end rate in your home currency and book the change as an exchange gain or loss. ZeraBooks AI bookkeeping follows the same bank reconciliation method.
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DEFINITION
The change in the home-currency value of foreign money you still hold, or still owe or are owed, because the exchange rate moved. It becomes realized when the money is actually received, paid or converted.
THE METHOD
In two passes. The bank only knows the foreign currency, so the statement can only prove the account in that currency. The home-currency figure is your books’ measurement of it.
Match every line and agree the closing balance to the statement, to the cent, in Canadian dollars, euros or whatever the account holds. Exchange rates play no part in this pass.
Every deposit and payment was recorded at a rate on its own date. Receipts and payments against invoices and bills settle at a different rate from the one the document was booked at; that gap is a realized gain or loss.
Multiply the foreign closing balance by the rate on the last day of the month. The difference from the home-currency amount carried in the books is an unrealized gain or loss.
Post the unrealized amount so the balance sheet shows the account at today’s value. Many accountants reverse it on the first of the next month and measure again at the next month-end.
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WORKED EXAMPLE, PASS ONE
Maple & Tide Trading is a fictional U.S. importer that keeps its books in USD and holds a Canadian-dollar checking account ending 5820. Its June 2026 statement, in CAD:
| Date | Line | CAD in | CAD out | CAD balance |
|---|---|---|---|---|
| 06/01 | Opening balance | 20,000.00 | ||
| 06/10 | Payment from Harbourline Foods, invoice of May 20 | 8,000.00 | 28,000.00 | |
| 06/18 | Payment to Cedar Ridge Packaging, bill of June 2 | 5,500.00 | 22,500.00 | |
| 06/30 | Monthly account fee | 25.00 | 22,475.00 | |
| June | Closing balance | 8,000.00 | 5,525.00 | 22,475.00 |
20,000.00 + 8,000.00 − 5,500.00 − 25.00 = 22,475.00, the closing balance printed on the statement. If the books’ CAD balance for the account is also 22,475.00, pass one is done. No rate has been used yet.
WORKED EXAMPLE, PASS TWO
The same month in USD. Rates are USD per 1 CAD and invented for the example. Each line is recorded at its own date’s rate; the documents behind the two payments were booked earlier, at other rates.
| Item | CAD | Rate | USD | Gain or loss |
|---|---|---|---|---|
| Opening balance carried | 20,000.00 | 0.7300 | 14,600.00 | |
| Invoice of May 20, as booked | 8,000.00 | 0.7280 | 5,824.00 | |
| Received June 10 | 8,000.00 | 0.7350 | 5,880.00 | 56.00 realized gain |
| Bill of June 2, as booked | 5,500.00 | 0.7360 | 4,048.00 | |
| Paid June 18 | −5,500.00 | 0.7400 | −4,070.00 | 22.00 realized loss |
| Fee June 30 | −25.00 | 0.7380 | −18.45 | |
| Carried at June 30 | 22,475.00 | 16,391.55 | ||
| Valued at June 30 rate | 22,475.00 | 0.7380 | 16,586.55 | 195.00 unrealized gain |
Carried: 14,600.00 + 5,880.00 − 4,070.00 − 18.45 = 16,391.55. Valued: 22,475.00 × 0.7380 = 16,586.55. The difference, 195.00, is unrealized because Maple & Tide still holds the Canadian dollars. The realized amounts net to 56.00 − 22.00 = 34.00: the customer’s CAD was worth more when it arrived than when invoiced, and the supplier cost more to pay than when billed.
THE ENTRIES
Maple & Tide’s June entries in USD. CAD checking is the bank account; the receivable and payable were recorded when the invoice and bill were booked.
| Event | Debit | Credit | USD |
|---|---|---|---|
| 06/10 customer pays | CAD checking 5,880.00 | Accounts receivable 5,824.00 | |
| Exchange gain or loss 56.00 | 5,880.00 | ||
| 06/18 pay supplier | Accounts payable 4,048.00 | CAD checking 4,070.00 | |
| Exchange gain or loss 22.00 | 4,070.00 | ||
| 06/30 bank fee | Bank fees 18.45 | CAD checking 18.45 | 18.45 |
| 06/30 revalue the balance | CAD checking 195.00 | Exchange gain or loss (unrealized) 195.00 | 195.00 |
After the last entry CAD checking shows 16,586.55 in USD, which is 22,475.00 CAD at the June 30 rate. Some businesses keep realized and unrealized amounts in separate accounts so the profit and loss shows which is which; your accountant decides. At month end, the revalued 16,586.55 is the figure a balance sheet reconciliation of the account should agree to.
QUICKBOOKS VS XERO VS ZERABOOKS
QuickBooks Online and Xero from their own help and product pages; ZeraBooks from its Help Center. We make ZeraBooks.
| Feature | QuickBooks Online | Xero | ZeraBooks |
|---|---|---|---|
| Which plans | Essentials, Plus, Advanced; not Simple Start | Established plan (US) | Included in the ZeraBooks subscription |
| Currencies | Add currencies under Settings, Currencies | Over 160 | Books in USD, CAD or EUR; accounts in one of the other two |
| Turning it on | Account and settings, Advanced, Currency; can’t be turned off, home currency then fixed | Foreign bank accounts can be added once multi-currency is on | Pick the account’s currency when adding it; books currency locks at the first transaction |
| Account currency | One per account; fixed once a transaction posts | One per foreign currency bank account | One per account; locks when the first statement lands |
| Exchange rates | Update automatically every 4 hours, or enter your own | Hourly rates | Journal lines and documents use the rate for their date |
| Gains and losses | Revalue Currency: A/R and A/P show as unrealized, bank accounts as realized | Realized on payment; bank revaluation account for foreign bank balances; unrealized for open invoices and bills | Payment differences on bills and invoices go to Exchange Gain or Loss |
| Watch out for | Can’t revalue while the books are closed | Plan upgrade needed from Early or Growing | No currencies beyond USD, CAD and EUR; no foreign opening balances when moving books |
Competitor facts from their public pages, checked October 22, 2026: Intuit: Set up and use Multicurrency in QuickBooks Online · Intuit: Enter home currency adjustments for your foreign balances · Xero: Multi-currency accounting (US) · Xero Central: Foreign currency accounts in the chart of accounts. Prices and features change; check each vendor before you buy.
WHERE IT GOES WRONG
Most problems come from mixing the two passes. Tell which pass is off first.
A normal reconciliation problem: a missing line, a doubled line, a flipped sign. Rates can’t cause a difference in pass one, so don’t look for one there.
A line was recorded at the wrong date’s rate, or an amount was entered in USD into the CAD account. Re-check the rate on each line against its date.
A payment from the CAD account to a USD supplier shows the CAD the bank took. Record what left the account in CAD; the bank’s rate decides the USD cost.
If last month’s unrealized entry stays in and this month’s is measured from the original carried amount, the gain is counted twice. Reverse it, or measure from the revalued figure; don’t mix.
A CAD statement uploaded or imported into a USD account. Every line is the right number in the wrong currency.
IN ZERABOOKS
ZeraBooks keeps each company’s books in one currency, USD, CAD or EUR, and lets a bank or card account be held in one of the other two.
ONE CURRENCY PER ACCOUNT
When you add a bank or card account, choose its currency if it differs from the books. Statements upload in that currency, and the currency locks once the first statement lands. A statement that names a different currency from its account isn’t imported, which stops the wrong-account mistake above. Each statement is then checked against its own printed opening and closing balance.
Add bank and credit card accountsRATES BY DATE
A bill or invoice in another of the three currencies posts at the exchange rate on its date, and any difference when it is paid goes to Exchange Gain or Loss, the realized amount in the example. A journal entry line in a foreign account is converted at the entry date’s rate and must balance in the books currency. More in the general ledger guide.
Currency and regionRealized gains and losses come from money that actually changed hands: a customer paid in CAD worth more or less than when you invoiced. Unrealized ones are on money you still hold or are still owed, measured at today’s rate, and can change again before you settle.
No. Reconcile it in the account’s currency against the statement, because that is the only currency the bank prints. The home-currency value is a measurement you add afterwards at the month-end rate. Foreign business accounts may also come as MT940 files, a bank format more common outside the U.S.
The closing rate for the last day of the period from the source your books use, applied the same way every month. QuickBooks Online and Xero each fetch rates automatically; your accountant may prefer a specific published rate.
Intuit’s help on home currency adjustments says adjustments on accounts receivable and payable show as unrealized, and on bank and other accounts as realized. Check with your accountant if your reporting needs the bank amount split out.
Yes, in all three products. QuickBooks Online allows one currency per account, Xero sets up a bank account per foreign currency, and ZeraBooks gives each bank or card account one currency that locks when its first statement lands.
Only US dollars, Canadian dollars and euros. A company picks one as its books currency, and accounts can be held in the other two. ZeraBooks is $79 a month billed annually or $149 monthly after a 7-day trial; see ZeraBooks pricing.
FREE SETUP + CATCH-UP
Add the account in USD, CAD or EUR, upload the statement, and watch it tie in its own currency. Free for 7 days, then $79 a month billed annually. Prefer to hand it off? See our bookkeeping services.