Three multi-currency decisions cause most of the reporting errors in Zoho Books. The first is the base currency, which is set when the organisation is created and in practice cannot be changed. The second is where exchange rates come from and which date they apply to. Zoho's automatic feed is convenient, but it is not always the rate your tax rules or accounting standards require. The third is the split between realised and unrealised exchange differences. Zoho records realised differences when a payment is applied, but open balances are revalued only when someone posts an adjustment. Get any of the three wrong and the profit and loss account and balance sheet drift quietly away from what they should show.
1. Base currency: chosen once, kept for good
The base currency is the currency your books are kept in. Every foreign transaction is converted into it, and your reports are prepared in it.
In Zoho Books, the base currency follows the business location chosen when the organisation is set up. Zoho's own help is clear on the limits. In a country-specific edition, the country, base currency and time zone cannot be changed. In the Global edition, the base currency can be changed only after deleting all transactions, custom accounts and opening balances. In practice, the choice made on day one is permanent.
The common mistake is choosing the currency most invoices are raised in, often US dollars, rather than the currency the entity must report and pay tax in. A company in India keeps its statutory books and files its returns in rupees. A UAE company reports VAT in dirhams. Set the base currency to the reporting currency of the legal entity, and treat dollar invoicing as foreign-currency activity within those books.
If the wrong base currency has already been set and transactions have been posted, the remedy is a new organisation in the right currency and a migration at a cut-over date. Plan that as a project, not a setting change.
2. Exchange rates: the source and the date
The source. Zoho Books updates exchange rates automatically, by default through an Open Exchange Rates feed, according to Zoho's currency settings help. That is a reasonable commercial rate, but tax law sometimes names a specific source:
- UAE VAT. Amounts on a tax invoice in a foreign currency must be converted at the rate published by the Central Bank of the UAE for the date of supply, under Article 69 of Federal Decree-Law No. 8 of 2017. The FTA's public clarification adds that the rate must be used to the number of decimal places the Central Bank publishes.
- Indian GST. Under Rule 34 of the CGST Rules, goods are valued at the rate notified by CBIC under section 14 of the Customs Act. Services are valued at the rate determined under generally accepted accounting principles for the date of time of supply.
- Indian accounting. AS 11 requires a foreign currency transaction to be recorded at the exchange rate on the date of the transaction. An average rate for a week or month is permitted only as an approximation where rates do not fluctuate significantly.
Where the feed does not give the rate the rules require, either enter the rate manually on each foreign-currency transaction, or turn off the feed under Settings > Organization Settings > Setup & Configurations > Currencies and maintain rates yourself. Zoho's help explains that when the feed is disabled, the current rate stays in effect until a new rate is added.
The date. This is the part people miss. A live feed supplies the current rate. If an invoice dated three weeks ago is entered today, check that the rate on it is the rate for the invoice date, not today's. Backdated entries are common during catch-up work and migrations, and each one entered at the wrong rate puts a small error into income and the receivable. When the invoice is paid, that error shows up later as an exchange gain or loss.
A simple control: for every foreign-currency invoice or bill above a set value, record the source and date of the rate in the reference or notes field. Review a sample at each month-end.
3. Realised versus unrealised: what Zoho does and what it does not
Realised differences arise when a foreign-currency invoice or bill is settled at a different rate from the one it was booked at. Zoho Books computes these when the payment is applied. The Realised Gain or Loss report, under Reports > Currency, lists them by transaction, covering only transactions with recorded payments.
Unrealised differences arise on balances still open at a reporting date: receivables, payables and foreign-currency bank balances. Accounting standards require these monetary items to be restated at the closing rate. AS 11 generally requires monetary items to be reported at the closing rate and exchange differences to be recognised in the profit and loss account, subject to specific exceptions in the standard. Ind AS 21 and IAS 21 take the same approach for monetary items.
Zoho Books does not do this automatically. There are two tools:
- The Unrealised Gain or Loss report shows what the restatement would be, as at a date and rate you enter. It is a report; the revaluation itself is posted separately. Zoho notes that bank accounts appear in it once bank statements have been matched to transactions.
- Accountant > Currency Adjustments (base currency adjustment) posts a revaluation of open transactions at a new rate you enter. A note is mandatory, and open transactions must exist for it to run.
The usual errors follow from this.
- No period-end revaluation at all. Foreign receivables, payables and bank balances stay at historical rates. The balance sheet misstates them, and the full exchange difference lands in the period of payment instead of being spread across the periods when rates actually moved.
- Revaluation posted but not understood. After the first adjustment cycle, review the Realised Gain or Loss report and the exchange gain or loss account together. Confirm that, across the adjustment and the later payment, each difference is recognised once, not twice and not missed.
- Bank charges recorded as exchange loss. Inward remittances often arrive net of intermediary bank charges. Record the charge as a bank charge, not as part of the exchange difference. Otherwise the exchange gain or loss line becomes impossible to interpret.
- Bank accounts left out. A foreign-currency bank account is a monetary item like a receivable. Include it in the period-end revaluation, and keep it reconciled so it appears in Zoho's report.
A short month-end routine for multi-currency books
- Reconcile every foreign-currency bank account.
- Spot-check the rates on the month's foreign-currency invoices and bills against the required source and date.
- Run the Unrealised Gain or Loss report at the closing rate for each currency, and review it.
- Post the revaluation through Currency Adjustments, with a note recording the rate source.
- Review the exchange gain or loss account and the Realised Gain or Loss report for the month, and investigate anything that is not explained by rate movements.
- Lock the month under Accountant > Transaction Locking.
Where this fits
Multi-currency is where small setup decisions have long-running effects. If you run entities in more than one country, see running Zoho Books for a UAE entity and an Indian entity for how these settings work across two organisations. If you are moving from QuickBooks, see what breaks in a QuickBooks to Zoho Books migration.
Wissen Solutions designs multi-currency ledgers and runs the month-end revaluation as part of our Zoho Books consulting and migration services.
Sources (checked 24 October 2026; Zoho updates its help pages and editions differ)
- Zoho Books: Using a different country edition
- Zoho Books: Changing base currency
- Zoho Books: Currencies and exchange rate feeds
- Zoho Books: Base currency adjustments
- Zoho Books: Currency reports: Realised and Unrealised Gain or Loss
- EY summary of FTA public clarification VATP004 on exchange rates
- CGST Rules, Rule 34
- ICAI, Accounting Standard (AS) 11, The Effects of Changes in Foreign Exchange Rates: initial recognition, average rates, monetary items at closing rate