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by sebastiennight 403 days ago
> Do I lose money on conversion rates? Yes

Depending on where your vendors are situated, you might avoid the conversion losses by having USD accounts AND EUR accounts.

We use two separate banks (for redundancy), each of which allows us to have incoming payments in EUR, USD, and a couple of lesser currencies (CAD, SGD) and we keep a balance in each.

And then we use the USD balance to pay, eg. DigitalOcean, and the EUR balance to pay eg BunnyCDN. So we mostly don't have to incur the conversion loss.
2 comments
skwee357 402 days ago
Correct me if I'm wrong, but as an EU registered business, I'm obligated to report all income in my local currency (EUR in my case). This means that if I get paid in non-EUR, I'm obligated to record the transaction as if it was EUR using the official exchange rate on the date of the transaction/invoice.

So, while I do get to keep the non-EUR in a dedicated account, I still record the transaction as if it was in EUR using, say, ECB rate. So it doesn't help with avoiding currency fluctuations (assuming my non-EUR pricing is fixed and not tied to latest exchange rate).

Obligatory: not an accountant; not an accounting advice.

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sebastiennight 400 days ago
That... seems correct, although in some jurisdictions (eg Singapore) my understanding is you can choose to report all your numbers in a different currency than the local one.

But... having to report numbers in EUR, doesn't mean having to convert to EUR. So you are *not* actually a victim of the currency fluctuation because the conversion didn't happen.

I could tell you right now that your 2024 revenue was 150 billion Zimbabwe dollars, and I could tell you next week that sorry, newsflash, 2024 revenue is actually 75 billion Zimbabwe dollars.

This wouldn't change your ability to pay your vendors (or yourself) in any way, because you don't really hold a ZWG account, so... whatever my spreadsheet says about that currency's fluctuations is immaterial to your actual business.

Cash power (ability to purchase the things you need) is what matters, so by keeping your USD and spending it on your USD purchases, you're somewhat shielded from the forex issue. (Though US inflation is another problem)

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openplatypus 403 days ago
Conversion risk is just small problem. It is plan devaluation that gets you over long time.

Your tactic over paying with USD revenue for USD bills is a good tactic.

Our policy is to avoid US vendors and USD subscriptions.

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