How does Seller Ledger handle multiple currencies?

When you sell to customers around the world, some of your sales, fees, and payouts may come in a currency other than US dollars. Seller Ledger converts those amounts to US dollars for you. That way you can see all of your business in one currency and match foreign payouts to the deposits in your bank account.

This article covers:

• Where foreign currency transactions come from
• How Seller Ledger converts them to US dollars
• How foreign payouts are matched to US dollar bank deposits
• What the Foreign Exchange Gain or Loss category is and where it shows up on your taxes
• What it costs (nothing extra)

Where do foreign currency transactions come from?

Amazon is the most common example. If you're a North American Amazon seller who also sells to customers in Canada or Mexico, Amazon treats those sales separately from your US sales. That means:

• Your Canadian sales and fees are reported in Canadian dollars (CAD), and your Mexican sales and fees in Mexican pesos (MXN).
• Amazon issues payouts for those marketplaces in the local currency.
• When those payouts reach your US bank account, they show up in US dollars (USD).

This creates two headaches for sellers:

1. Matching payouts to bank deposits. How do you know that a payout of $2,316.43 MXN from Amazon is the same as a deposit of $123.80 USD in your bank?
2. Seeing your whole business in one currency. Even after you match them, you still need one Profit & Loss report that compares all of your sales and expenses in the same currency.

Seller Ledger handles both of these for you automatically.

How Seller Ledger converts foreign currency amounts

Seller Ledger uses currency exchange rates to convert foreign currency amounts into US dollars.

Marketplaces like Amazon don't tell us the exact exchange rate used for each transaction. So Seller Ledger uses the daily spot rate, which is the market exchange rate for that day, to convert each transaction from its original currency to USD.

Viewing foreign currency transactions

To see converted transactions:

1. From your dashboard, click into the marketplace account with foreign currency activity (for example, your Amazon Canada or Amazon Mexico account).
2. Scroll to any transaction that isn't in US dollars.
3. You'll see the amount in US dollars, with the original currency amount shown underneath it.

These US dollar amounts are what flow into your Profit & Loss report and your Schedule C tax report. That gives you one apples-to-apples view of your business.

How foreign payouts are matched to bank deposits

Seller Ledger matches foreign currency payouts from your marketplace to the US dollar deposits in your connected bank account. It treats each pair as a transfer, so the payout isn't counted as income twice. (Your income was already recorded when the orders came in.)

To see the match for a payout:

1. Click into your marketplace account from the dashboard.
2. Find the payout transaction.
3. Click expand next to the payout.
4. You'll see the payout in its original currency, matched to the US dollar deposit in your linked bank account.

What if a foreign payout doesn't match automatically?

Sometimes a payout and its bank deposit don't match on their own. This can happen when the payout was in a foreign currency and the deposit was in USD, or when the two arrived a few days apart. If you see the deposit sitting as "uncategorized income" in your bank account:

1. Click into your bank account from the dashboard.
2. Find the uncategorized deposit.
3. Click the yellow Uncategorized income button.
4. Scroll to the bottom of the category list and choose Transfer: [your marketplace account name]. For example, choose Transfer: Amazon Mexico.
5. Click Save.

For more help with unmatched payouts, see Why are some of my payouts being categorized as uncategorized income?

What is "Foreign Exchange Gain or Loss"?

Exchange rates change constantly. The rate your bank used when it converted your payout is often slightly different from the spot rate Seller Ledger used to convert your sales and fees. As a result, the US dollar value of a payout usually won't exactly equal the US dollar deposit that lands in your bank.

Seller Ledger records that difference in a category called Foreign Exchange Gain or Loss.

A quick example

The numbers below are just for illustration. Let's say:

• Amazon Mexico sends you a payout of $2,316.43 MXN.
• Using daily spot rates, Seller Ledger converts the sales and fees behind that payout to $124.10 USD.
• Your bank deposit shows $123.80 USD.

The $0.30 difference is recorded as a foreign exchange loss. If the deposit had come in higher than $124.10, the difference would be recorded as a foreign exchange gain.

How it appears in your reports

• On your Profit & Loss report, Foreign Exchange Gain or Loss shows as a negative number if you lost money overall on currency conversion. It shows as a positive number if you came out ahead.
• On your Schedule C tax report, this category rolls up to Line 27a: Other expenses.

For most sellers, these amounts are small. If you'd like to understand the tax rules behind foreign exchange gains and losses, look up Section 988 of the Internal Revenue Code or talk with your tax professional.

Does multi-currency cost extra?

No. Multi-currency support is included in every Seller Ledger plan at no additional cost. That includes currency conversion, payout matching, and foreign exchange gain or loss tracking. You don't need to:

• Upgrade to a higher tier
• Subscribe to a separate connector tool to reconcile your foreign payouts

How do I set my home currency?

Seller Ledger will ask you for your home currency when you first sign up. If you signed up for Seller Ledger before we introduced currency conversion, you can set your home currency by going to Settings -> Business and clicking the "Configure now" link.

Can I change my home currency once it is set?

No. For a number of reasons tied to accounting and data integrity, once you set your home currency, it cannot be changed.