On May 18th, Enterprise Services Manager @Monique Romero hosted a Finance Workshop and shared her best practices on exchange rates and the gains/loss report in Zuora Billing.
The session began with a Tool Tip on how to setup your home currency which is used to calculate your exchange rates in Zuora and it’s important to enable it if you process foreign currency. Following the tool tip, Monique dove into the main topic on foreign currency gains and losses.
Enabling Home Currency in Zuora
To calculate conversion rates in Zuora, you can use the exchange rates posted by the default exchange rate provider, Oanda, or import custom exchange rates through the Mass Updater. Once Home Currency is set in your environment, it cannot be changed. Each transaction in Zuora has an Exchange Rate Date. If you are using Oanda, Zuora uses the exchange rates 1 or 2 days before the Exchange Rate Date depending on your time zone.
Check out the video below for a deeper understanding and view the presentation here.
Foreign Currency Gains and Losses
What Are Foreign Currency Gains and Losses?
Note: Your home currency must be configured before using this feature
When you sell products or services to customers in a foreign currency, the value of that currency changes based on the exchange rate. If the value of the currency goes up or down after you invoice a customer but before you collect payment, then you have made a foreign currency gain or loss on that invoice.
What Are Realized Gains and Losses?
A gain or loss is "realized" when the customer pays the invoice.
Example: Home currency is USD
What Are Unrealized Gains and Losses?
A gain or loss is "unrealized" if the invoice has not been paid by the end of the accounting period.
Example: Home Currency is USD
How do I view my Foreign Currency Exchange Data?
Note: Your accounting periods must be created and trial balance must be run for an up-to-date report.
In the Accounting period > Balances Tab > You can view:
- Foreign Currency Exchange Summar
- Realized Gain/Loss Detailed Report
- Unrealized Gain/Loss Detailed Report
NOTE: Zuora does not create Journal entries for gains/loss. The reports are for your information, so you can create the JE’s in your ERP.
Reports in Accounting Period to create JE’s for Gains/Loss
Screenshot from the accounting period below:
It is a good best practice to run your trial balance several times a day so that it updates your balances and the accounting period so you will have the most current transaction summary created in the current month.
Run your trial balance and once that completes, the balances tab will update where you will see the “Foreign Currency Exchange Gains/Loss” header. In that section, you’ll be able to download the details of the gains/loss - realized and unrealized.
Are You In the Finance Work Group?
We know that there’s a lot to absorb at our best practice workshops so we decided to create work groups for all workshop attendees to review past workshops and work through best practices with each other with the guidance of the Zuora expert. Become a work group member by attending a workshop! Monthly sessions are announced in Community News. Follow these steps to sign up and select the frequency you’d like to receive emails.