Managing Foreign Transactions: Multi-Currency Accounting in TallyPrime

Published on: 30-05-2025

Managing Foreign Transactions: Multi-Currency Accounting in TallyPrime

In today's globalized business landscape, dealing with multiple currencies is common for companies engaged in international trade. TallyPrime, a powerful business accounting software by Tally Solutions, provides robust support for multi-currency accounting. This feature allows businesses to manage accounts, transactions, and reports in foreign currencies while maintaining accurate records in the base currency.

This guide walks you through the process of setting up and using multi-currency accounting in TallyPrime.

1. Understanding Multi-Currency in TallyPrime

TallyPrime supports the creation and use of multiple currencies beyond the base currency (typically the currency of the country where the business is located). It allows users to:

• Record transactions in foreign currencies.
• Maintain customer/supplier ledgers in different currencies.
• Convert currencies using real-time exchange rates.
• Generate reports in foreign or base currency.

2. Enabling Multi-Currency Feature

Before using multiple currencies, the feature must be enabled in TallyPrime.

Steps:

1. Open TallyPrime.
2. Press F11 (Features) > Select Accounting Features.
3. Set Enable Multi-Currency to Yes.
4. Accept and save the configuration.

This will allow you to create and use multiple currencies in vouchers and ledgers.

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3. Creating a New Currency

After enabling the feature, you can define foreign currencies.

Steps to Create a New Currency:

1. Go to Gateway of Tally > Create > Currency.
2. Enter the details:
   • Symbol (e.g., $, €, ¥)
   • Formal Name (e.g., US Dollar, Euro, Yen)
   • ISO Code (e.g., USD, EUR, JPY)
   • Number of decimal places (usually 2)
   • Decimal Places for Amount in Words (optional)
   • Conversion Rate (e.g., 1 USD = ₹83.50)
3. Accept the screen to save.

You can update the conversion rate periodically or enter it while recording transactions.

4. Assigning Currency to Ledger Accounts

Once you have created foreign currencies, assign them to the ledgers of foreign customers or vendors.

Steps:

1. Go to Gateway of Tally > Alter > Ledger.
2. Select a party ledger (e.g., overseas customer).
3. In the ledger configuration, set:
   • Currency of Ledger to the required foreign currency.
4. Accept to save.

This ensures transactions recorded under this party will be in the assigned currency.

5. Recording Transactions in Foreign Currency

You can now create sales, purchase, receipt, and payment vouchers using the foreign currency.

Example: Recording a Sales Invoice in USD

1. Go to Gateway of Tally > Accounting Vouchers > F8 (Sales).
2. Select the customer ledger with USD as the currency.
3. Enter the item details, quantity, rate, etc.
4. Tally will auto-prompt for the exchange rate.
5. Enter the current exchange rate (e.g., 1 USD = ₹83.75).
6. The total in both USD and INR will be shown.
7. Save the voucher.

Tally automatically converts the amount into base currency using the provided rate.

6. Viewing Ledger and Reports in Multi-Currency

TallyPrime allows viewing ledger balances and reports in either base or foreign currency.

To View Ledgers:

• Go to Display > Account Books > Ledger.
• Select the desired ledger.
• Press F12 and enable the option to show foreign currency if needed.

To View Outstanding Reports:

• Go to Display > Statements of Accounts > Outstandings > Receivables or Payables.
• Party balances will be displayed in both currencies if configured.

7. Adjusting Exchange Rates (Forex Gain/Loss)

TallyPrime allows adjustments for foreign exchange fluctuation, critical during reconciliation.

Steps:

1. Go to Gateway of Tally > Vouchers > F7 (Journal).
2. Debit or credit Exchange Gain/Loss ledger.
3. Use the Forex Gain/Loss feature to automatically compute the variation.
4. Pass the adjustment entry.

This helps reflect true financial position and comply with accounting standards.

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8. Foreign Currency Bank Account

To maintain a bank account in foreign currency:

1. Create a Bank Ledger with the required currency.
2. Use this ledger while recording bank transactions.
3. You can also reconcile foreign bank statements in Tally.

9. Printing Invoices in Foreign Currency

TallyPrime allows printing sales invoices in both currencies.

Steps:

• After entering a transaction, click Print > Configure.
• Enable Print in Foreign Currency.
• Tally will show both INR and foreign currency values in the printed invoice.

This is especially useful for international customers.

10. Benefits of Multi-Currency in TallyPrime

• Saves Time: Automatic currency conversion simplifies bookkeeping.
• Accurate Financials: Real-time exchange rate entry ensures correct accounting.
• Professional Invoicing: Generate invoices in client’s currency.
• Better Decision Making: Multi-currency reports provide a clearer global financial picture.
• Audit Ready: Transparent currency conversion trail aids in audits and compliance.

Final Thoughts

Multi-currency accounting in TallyPrime is a powerful feature that can significantly simplify the operations of businesses dealing with international clients and suppliers. From setting up currencies to recording, reporting, and adjusting exchange rates, Tally provides a complete toolkit to manage global financial transactions seamlessly.

Make sure to periodically update exchange rates, review forex gain/loss adjustments, and generate reports in both currencies to get the most out of TallyPrime’s capabilities.