What this page is about: This article covers how currency is set on a bill, how payment currency and FX conversion work when a bill is paid in a foreign currency, how exchange rate overrides are applied, and how realised FX gain or loss is posted. It's written for anyone processing vendor bills or payments in Light, whether you're approving a payment or reconciling the accounting entries behind it.
On this page
- How currency is set on a bill
- How payment currency and FX conversion work
- Exchange rate overrides and precedence
- Bills listed in multiple currencies
- Bank accounts and currencies
- FX gain / loss posting
- Also searched as
Every bill in Light keeps its own currency. It doesn't inherit the currency of your company's functional reporting currency, and it doesn't inherit the currency of the bank account paying it. Light converts currency automatically in the background, using the bill's currency, the bank account you pay from, and the payment date.
How currency is set on a bill
A bill's currency is captured when the bill is created, from the uploaded document or manual entry. The vendor record has its own currency field, but it's never copied onto the bill, vendor currency only plays a role in which bank account gets suggested when you pay. The currency shows in the bill header and in the bills list, and the bill amount is stated in that currency.
How payment currency and FX conversion work
When you pay a bill in Light:
- The payment is always sent in the bill currency. The vendor receives the amount stated on the bill, regardless of what currency your bank account holds.
- The Pay from account, the company bank account you select on the bill, determines the currency your account is debited in.
- If the bill currency matches the Pay from account's currency, the account is debited at face value. No conversion happens.
- If the bill currency differs from the Pay from account's currency, your bank or payment provider converts the amount at execution. Light books the actual debited amount, in the Pay from account's currency, once the payment clears.
Light doesn't convert currency itself at send time. The conversion happens at your bank or payment provider, at the point the payment executes. There's no manual FX rate override in the payment entry dialog.
For accounting entries, and for bills marked as paid manually without an executed payment, Light applies its own exchange rate for the payment date. It checks for an entity-level exchange rate override first, then a company-level override, and applies whichever it finds. If neither exists, Light uses the ECB reference rate for that date.
Bills listed in multiple currencies
The bills list shows each bill's amount formatted in its own native currency. There's no totals or footer row, and no currency-grouped aggregate anywhere in the payables tables, each row stands on its own, with no combined or blended figure across currencies.
Bank accounts and currencies
Each company bank account is denominated in one currency. Set this up under Settings → Bank accounts. To pay vendors in a given currency without triggering FX conversion, create a bank account in that currency and select it as the Pay from account on bills in that currency.
FX gain / loss posting
When a bill in one currency is paid from a bank account in another currency, Light compares the bill's posting rate to its clearing rate, the rate in effect when the payment clears the bill. The difference creates a realised FX gain or loss, which Light's accounting engine posts automatically to the system FX gain and FX loss accounts.
For period-end FX revaluation across open accounts payable balances, see the FX revaluation tools in the accounting module.
Related articles
Also searched as: foreign currency bill payments, FX conversion on vendor payments, cross-currency AP payments, multi-currency accounts payable, bill currency vs bank account currency, realised FX gain loss, ECB exchange rate override.
Was this article helpful?
Thanks for the feedback!