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The ability to allocate overpayments to foreign currency bills.

Currently we can only post an overpayment in GBP. There is then no functionality to allocate this payment to a foreign currency invoice. There are a few work arounds all not very ideal and cumbersome.

The ability to either allocate these to foreign currency or create an overpayment in the foreign currency that would then allow the allocation of the overpayment would save a great deal of time and effort.

We recently migrated our client from QuickBooks, they are not too happy with the work arounds and much prefer the way QuickBooks worked. Bit of a sticking point for them.

Thought I'd post the below from Xero support in case it helps anyone, but it's not a great workaround for me, that's for sure!

'Currently it's not possible to add a prepayment in a non-base currency in Xero.

In the meantime, you could do one of the following:

If there's no income or tax recording requirement, you can record the payment using an overpayment transaction. This will create a credit in your customer's or supplier's account that can be applied to the invoice or bill once it's generated.

If there's an income or tax recording requirement:

Create a spend or receive money transaction (according to the payment type) in the contact's name, and code it to a 'prepayment' balance sheet type account. This will record the bank account transaction, however it won't show on the customer's statement / supplier's account.
Create a credit note (customer or supplier) coding it to the same prepayment account and using the same tax treatment transaction used in the previous step. This will record the payment on the customer or supplier account.

Once the actual invoice or bill is created:

Enter the invoice or bill in the usual manner.
Edit the credit note so that has the same date as the invoice or bill.
Apply the credit note to the invoice or bill.
Create a manual journal to clear any residual balance out of the prepayment account, to Realised Currency Gains/Losses account (default 499).'

I need this option, it is very important for my organization.

What will it take to get an update on this; XERO customers are global businesses

Prepayment functionality for foreign currency transactions is crucial, especially for multinational corporation. MNCs frequently deal with foreign suppliers and customers, making prepayments a common practice for securing goods or services. Without proper prepayment support in Xero for foreign currencies, it becomes challenging.

Prepayments are basic bookkeeping and fundamental to the accruals basis of accountancy. It's astonishing to me that I can't record a prepayment in Xero in a currency other than our base currency. This isn't a nice to have, it's absolute basics.

This is such a no brainer. I cant understand how any company dealing internationally can stay with Xero whilst this remains unfixed. I have to putthrough payments as overpayments just so that the whole international currency thing will work. This was way easier in MYOB and at $5 per month I would consider gfoing back as Xero offers very little improvement if any.

Too many customers need this function and the work arounds are too time consuming. This needs to implemented now. Thank you.

Also the ability to mark a selection of invoices or bills as paid in your non-base currency. A simple feature that 10 years later is still not possible.
I am moving to a system called iPlicit.

This idea dates back to 2013, and Xero has done absolutely nothing about it in more than 11 years. It really amazes me that Xero has not implemented a multi-currency prepayment flow, but there is one for overpayment. It does not make any sense to me at all. Every day, Xero convinces me that I should stop using their software. I am definitely not adding new customers to Xero.

Its very important function and a must for companies dealing in multi-currency. Please add the service.

A much-needed addition to your service, please.

Highly essential for businesses dealing with multi-currency transactions. Would simplify so much for us!

This is a must have for international businesses.

It's ridiculous to see that Xero does not allow multi-currency prepayment booking without it creating fx difference in the prepayment GL when it is to be recognized in the relevant reporting period that the transaction relates. This is needs to be sorted as soon as possible, please.

There is some advice on a work-around here:

https://central.xero.com/s/question/0D53m00009LQ0DnCAL/prepayments-in-a-foreign-currency

...but it seems to attempt to properly calculate currency gain/loss by changing the credit note date to match the invoice date when the prepayment credit is actually applied. As far as I understand this only works when folks are prepaying on an invoice by invoice basis where the prepayments closely align with individual invoices. If you have one prepayment applied to many invoices I guess you would need to manually create a ton of credit notes (one per prepayment+invoice-credit combo) in order to get the currency gain/loss calculated correctly.

In my experience many European and US companies run prepaid accounts where many invoices over time may be credited off a single prepayment. Annoying but they won't switch to invoiced billing until you hit a certain scale.

Would be really great if this feature gets implemented soon as it will save a ton of work. We are making changes to which vendors we work with because of the complexity on the Xero end...not a great sign. Maybe the days of Xero being ahead of the curve for SMEs are over.

Two possible resolutions. We take prepayments in Euros which is not our base currency, which is GBP.

We do it by issuing a credit note to the client, and removing the allocation against the invoice. When they pay the invoice they now have a credit balance, against which we credit future invoices.

Clunky but it works. It does give you a negative accounts payable and receivable, but we’re used to that.

Alternatively move to a system called Iplicit. More expensive but much more powerful.

Hello Xero Support,

We are looking to pass sales receipts as prepayment transactions from our Travel Booking System to Xero Accounting using the Xero API Endpoint https://api.xero.com/api.xro/2.0/BankTransactions
The base currency in our Xero organisation is USD, however we take prepayment receipt transactions from our customers in both USD and ILS (Israeli New Shekel). We then need to allocate them against USD sales invoice transactions generated in our booking system and passed to Xero using the https://api.xero.com/api.xro/2.0/Invoices

Our understanding is that Xero:

1. Does not allow prepayment transactions to be generated via the API if they are in a foreign currency and only allows them in the Xero base currency.
2. Does not allow payment transactions (prepayment or overpayment) to be allocated against a sales invoice in a different currency to the payment itself, e.g. allocating a payment in ILS to a sales invoice is USD, or vice versa.

Please can you advise how Xero recommends we should handle this scenario and whether it is on your product roadmap to resolve?

Really shocked to see Xero doesn't natively support this!

+1 an absolutely must have