Running a business across several currencies
The problem isn’t the currencies: it’s that a single exchange-rate cell rewrites the past. If you convert everything at today’s rate, updating that cell in August changes March’s result, and comparing months becomes impossible. The only way out is fixing every entry to the rate of the day it happened, and never touching it again.
How a spreadsheet lies without meaning to
Almost all of them start the same: a tab per account, one per category, one summary, and a cell with the exchange rate updated by hand whenever someone remembers.
That cell is the problem. Because every calculation looks at it, updating it in August rewrites March, April and May. The past does not hold still, and so you cannot answer the most basic question in a business: was this month better than the last?
Three ways to convert, and which one works
Everything at today’s rate. Gives coherent balances today and destroys month-to-month comparison. This is what the spreadsheet does.
A period average. Smooths the jumps but invents a number that never occurred, and you cannot reconcile it against a real statement.
The rate of each entry’s own day. The only one that allows an audit: every figure corresponds to something that happened. It’s uncomfortable at first — historical balances stop adding up against today’s rate — but that’s the price of numbers you can trust.
Personal and company: the rule that ends the argument
If you are an owner, your finances and the company’s are one economy and you need to see them together and apart. The mistake is solving that with a screen filter.
Ownership has to be a rule of the model: an entry belongs to the company if it is marked as such or lives in an account the company owns. Because it’s a single rule, no screen can contradict another, and profitability stops depending on a row-by-row review.
Looking forward without making promises
Almost all financial software explains the past. What an owner needs to know is whether they make it to month end.
Projecting forces you to separate what is committed, what is likely and what is assumed. One honest way to show it: the projection is drawn dotted against the solid lines of the past. Nobody mistakes a dotted line for a fact, and that distinction does the work a disclaimer does not.
When leaving the spreadsheet is justified
When the month close takes you a day, when you no longer trust month-to-month comparison, or when someone else needs to read the numbers without you explaining them. Before that, the spreadsheet is fine. It is the same question that shows up on the client side when the spreadsheet runs out for the work itself: you do not switch because of volume, you switch when more than one person needs the same record.
Frequent questions
Which rate do I use: the bank’s, the published one, or the one I paid?
The one you actually paid on that transaction. If you bought dollars at a given value, that is the number, not the published rate for that day. The rule is that every figure must reconcile against a statement.
What if my accounting software already does this?
Accounting tools solve the accounting conversion, which is a different question: they exist to report, not to decide. They look backwards and do not project. Many businesses need both, and they are not the same thing.
I have two years of badly converted spreadsheet, do I start over?
You do not have to redo everything. Pick a cut-off date, leave the history as it is and label it not comparable, and from that date on record every entry at the rate of its own day. Within three months you will be able to compare months against each other, which is what you need in order to decide. Rebuilding two years backwards is only justified if you have to present them to someone.