Do you know that in tally, you can make transactions in any currency?
Multi currency in tally is a built in feature enable you to transact in any foreign currency.
By default this feature is disabled. You have to enable it first.
From the Gateway of Tally Press F11 -> Accounting Features and under General Allow Multi Currency option set to “Yes”.
Now from the Gateway of Tally -> Accounts Info -> Currencies ->Create your currencies.
Keep in mind that currencies is completely user defined. That means any symbol and the name you can give. For Example for US Dollar (is the formal name) You can give USDollar or Dollar US or anything. Like wise the symbol you can give $ or USD or $US or anything.
Now you have to define the Rates of Exchange.
From the Gateway of Tally -> Accounts Info -> Currencies -> Rates of Exchange
All your currencies will show here automatically. You can give 3 rates. St. Rate, buying Rate, selling Rate.
When you make a transaction like a purchase or a sale depending on the current rate, the forex profit or loss is the difference between this std. Rate. So it is important to put a standard rate here. The other 2, selling and buying rates, tally will automatically update here.
Foreign exchange gain or loss depending on fluctuation of exchange rate, are ‘posted’ automatically automatically (as a notional entry), whenever any report is taken. The day you decide to make these entries regular (say end of the financial year) you can post the required accounting Journal to realize this as profit or loss.
Now how to make a transaction in foreign currency?
In any transaction, in the amount column, type the amount with the currency symbol together.
For example for 200 dollar you have to type 200USD, where as the USD is the symbol for US Dollar.
immediately a new screen will popup as shown in the picture below.
Here you can change the current rate.