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Dear Xero Product Team,

I would like to bring to your attention a critical limitation in Xero’s current multi-currency functionality, specifically relating to manual journal entries.

At present, Xero only allows manual journals to be posted in the base currency of the organisation. While this may be suitable for single-currency environments, it presents significant challenges for organisations operating in multi-currency contexts.

Business Context

Our organisation operates in Nigeria with Naira (NGN) as the base currency, while a substantial portion of our transactions — including partner funding, intercompany balances, and adjustments — are denominated in United States Dollars (USD).

In such an environment, manual journals are frequently required to:

• Record partner cash calls and equity contributions
• Post intercompany adjustments
• Recognise accruals and reclassifications in foreign currency
• Adjust balances for reporting and audit purposes

Current Limitation

Because Xero restricts manual journals to base currency only:

• All foreign currency adjustments must be converted to NGN at the point of entry
• The original USD value of transactions is not preserved in the journal
• Subsequent exchange rate fluctuations distort the financial position

Key Issues Identified

1. Loss of Transaction Integrity
   When a USD-based transaction is recorded via manual journal in NGN, the original currency value is effectively lost. This makes it difficult to track the true economic value of the transaction.

2. Exchange Rate Volatility Impact
   Due to repeated conversions at different rates, values fluctuate over time. For example, a USD 1,000 adjustment posted earlier in the year may no longer reflect its true value at reporting date, leading to inconsistencies.

3. Audit Concerns
   The inability to maintain original currency values in journals creates challenges during audit reviews. It becomes difficult to justify movements and reconcile balances accurately, raising concerns about reporting reliability.

4. Operational Inefficiency
   Significant manual effort is required outside Xero (e.g., Excel schedules) to track foreign currency positions, increasing risk of error and reducing efficiency.

Proposed Enhancement

We propose that Xero introduces the ability to post Manual Journals in Foreign Currency, with the following features:

• Selection of transaction currency (e.g., USD, NGN, etc.)

• Entry of amounts in both:

  • Transaction currency (e.g., USD)
  • Base currency equivalent (auto-calculated or manually overridden)

• Capture of exchange rate used

• Storage of both:

  • Original currency value
  • Converted base currency value

Illustrative Example

| Date | Account Code | Description | Currency | Exchange Rate | Debit (USD) | Credit (USD) | Debit (NGN) | Credit (NGN) |
| ----------- | ------------ | ----------------- | -------- | ------------- | ----------- | ------------ | ----------- | ------------ |
| 01-Jan-2026 | 3001 | Partner Cash Call | USD | 1,600 | 1,000 | - | 1,600,000 | - |

Expected Benefits

• Preservation of original transaction currency values
• Elimination of distortions caused by repeated conversions
• Improved audit transparency and traceability
• Enhanced support for multi-currency environments
• Alignment with capabilities available in enterprise accounting systems

Conclusion

While Xero has strong multi-currency capabilities in transactional modules (such as invoicing and bank accounts), the restriction on manual journals significantly limits its effectiveness in more complex financial environments.

Introducing foreign currency support for manual journals would greatly enhance the platform’s robustness, particularly for organisations operating across currencies.

We strongly encourage the product team to consider this enhancement as a priority.

Thank you for your attention and continued innovation.

Kind regards,
Okusonogu Columbus Nduka