How to set up multi-currency accounting in Syrian pounds and US dollars in an ERP: exchange rates, exchange differences, revaluation and reporting.
Most companies in Syria deal with more than one currency every day: they buy some materials in dollars, sell in Syrian pounds, and hold cash in both. When these transactions are kept in separate ledgers or spreadsheets, it is hard to know the real profit, the value of stock, or each customer's actual balance. That is why multi-currency accounting in an ERP system has become a practical necessity rather than an extra feature. This article explains the core concepts, how they are configured in the system, and the mistakes that recur during implementation.
Why spreadsheets are not enough for two currencies
The problem is not recording an amount in two currencies; it is linking each transaction to the correct exchange rate on its date, then tracking the effect of rate changes until payment. A sales invoice issued in dollars and paid in pounds a month later carries an exchange difference that must appear in the accounts, and if it is not recorded, profits and balances are misleading. In manual spreadsheets these differences are often forgotten, or calculated differently by each employee.
An ERP system solves this by storing each entry in its original currency alongside its equivalent in the company's base currency, and calculating differences automatically on payment or at period-end revaluation. The result is a single consistent ledger and reports you can rely on for pricing and purchasing decisions.
Core concepts in multi-currency accounting
- Company base currency: the currency of the official financial statements, into which all other transactions are converted.
- Transaction currency: the currency in which the invoice, purchase order or payment was actually issued.
- Rate on the transaction date: the rate used to convert the amount into the base currency when it is recorded.
- Realised exchange differences: the difference that arises when an invoice is paid at a rate different from its issue date rate.
- Unrealised exchange differences: the effect of rate changes on open balances at period-end, shown through revaluation.
- Reporting currency: an additional currency management may need for presenting results, such as showing profit in dollars to compare periods.
To illustrate with a simple example: the company issues a sales invoice in dollars, and the system records it at its dollar amount with the pound equivalent at the issue-date rate. When the customer later pays in pounds at a different rate, the system compares the two values, creates an exchange gain or loss entry for the difference, and closes the invoice. If the invoice is still open at month-end, revaluation shows the effect of the rate change on the customer balance in reports without altering the original invoice. This keeps figures traceable and auditable at all times.
Configuring the system step by step
- Agree with your certified accountant on the base currency for the books and the reference rate the company will use, and document the policy in writing.
- Activate the currencies you use, and define who may enter and change exchange rates, and how often: daily or weekly.
- Create separate accounts for realised and unrealised exchange gains and losses so they remain visible in the income statement.
- Separate cash boxes and bank accounts by currency; the dollar cash box should never be mixed with the pound cash box.
- Set the currency for each customer, supplier and price list so invoices are issued in the agreed currency automatically.
- Schedule revaluation of open balances at the end of each month, and review the entries before closing the period.
Pricing and inventory when the rate changes
One of the most common questions: do we price products in dollars and convert to pounds at the point of sale, or update the pound price list periodically? There is no single answer, but a good ERP supports both through multi-currency price lists and shows the salesperson the price in both currencies before invoicing. What matters is that the decision is a clear policy, not individual judgement.
Inventory is usually valued in the base currency according to the chosen costing method, so dollar purchase invoices must be recorded at their date's rate for item cost to be correct. When reviewing margins, compare the cost of goods sold with the selling price in the same currency; otherwise you will see paper profits caused by rate movements rather than sales. You can read more about Odoo in Arabic for Syrian companies and how it handles currencies and stock.
Common mistakes when implementing multi-currency accounting
- Entering exchange rates retroactively after invoices are posted, changing figures already approved.
- Recording payments in a currency different from the invoice without reconciling them, leaving the invoice open and a phantom balance.
- Converting only the final reports at a single rate instead of recording each transaction at its own rate.
- Skipping periodic revaluation, so customer and supplier balances drift away from their actual value.
Avoiding these mistakes depends more on correct initial setup and clear training for accountants and sales staff than on custom development. If you are still comparing systems, see our guide to choosing an ERP system in Syria.
Start with the right setup
At Haaltech we help companies design the chart of accounts and currency policy and configure them in the ERP system before migration, then test them on real transactions before go-live. If your figures in the two currencies do not reconcile today, contact us to review your situation and propose a practical plan.