It might happen your company has the chance to operate with clients in different countries. Congrats! It could then happen you invoice them in various money to ease their life.
On your side, you are willing to manage and watch all your revenue in one single currency. Yours. That currency is what we call your Home Currency or your Preferred Currency. Managing amounts of revenues in different currencies may become a real headache quickly as exchange rates changes daily and it consumes all of your time due to retrieving historical conversion rates.
kopilot converts all your invoices into your home currency. It is simple to handle all your revenues consistently.
About Exchange Rates
In the world's currency markets, traders define the rates at which they are willing to "buy" or "sell" a specific currency. The difference between the Buy and Sell rates is called the spread.
The exchange rate we may find on general search engines is the mid-market rate (also called midpoint data). The mid-market price is the average between what the buyer is prepared to pay and what the seller is ready to sell. In other terms, the mid-market rate is simply the midpoint between demand and supply for a currency, and because of that, it changes all the time.
Midpoint rates are determined by calculating the average median price of Bid and Ask at a specific time.
The mid-market rate is an exchange rate, unlike any other. It's the authentic one because it shows the actual exchange rate between two currencies, without any extra fees or hidden overheads.
Banks and money transfer providers do use this rate, usually when they trade between themselves. Unfortunately, it's not the rate they pass onto you. Most providers take the mid-market rate, and apply a margin on top, without being transparent. This is the reason why small changes may occur between the converted amount and the amount for the same transaction on your bank statements.
Two kinds of exchange rate are known:
→ Spot: this is the real-time exchange rate based on the demand and supply for a currency. It may vary every nanosecond.
→ End-Of-Day (EOD): this is the official historical exchange rate based on the median price of Bid and Ask at a specific time.
Our Conversion Framework
All amounts are converted into your home currency on the issue date of the transaction with the End-Of-Day mid-market exchange rate, except:
- the case a deal has an issue date in the future;
- the situation a transaction occurs today and needs to be reported today.
A transaction or a document having a date in the past
The foreign amount is converted into the home currency at the date the transaction occurred.
A transaction or a document happening today
The foreign amount is converted into the preferred currency with the spot (or the latest available) exchange rate.
Then the day after, the amount is updated with the end-of-day exchange rate.
API generally releases End-Of-Day exchange rates at 00:05 am GMT for the previous day and time-stamps them at one second before midnight.
A transaction or a document having a date in the future
The foreign amount is converted into the home currency with the spot (or the latest available) exchange rate.
Then, the foreign amount will be updated the day after the issue date with the End-Of-Day exchange rate.
→ kopilot converts all your invoices into your home currency. It is simple to handle all your revenues consistently. It allows you to :
- 💪 Boost and advance your credit collection based on amounts, whatever the currency.
- 🔎 Compare your sales revenues in the money you’re used to for a better understanding.
📓 List of currencies: here.