Handling IQD and USD in your books

Few things cause more month-end headaches for businesses in Iraq than working in two currencies. Prices are in dollars, some customers pay in dinars, suppliers invoice in dollars, and salaries may be paid in either. Here is a practical way to keep your numbers clear.

Why it gets messy

A customer buys goods priced in dollars, pays half in dinars today and the rest in dollars next week. A supplier in Erbil invoices you in dollars, but you pay the transport in dinars. If all of this goes into one spreadsheet column, converted at whatever rate someone remembered, the totals stop meaning anything. You cannot tell whether you made money or whether the exchange rate simply moved.

Rule 1: Record each amount in the currency it really happened in

An invoice issued in dollars stays a dollar invoice. A payment received in dinars is recorded in dinars. Do not convert at the moment of entry unless you actually exchanged the money. That way your records match the cash in the drawer and in the bank.

Rule 2: Keep a separate cash account for each currency

Your cash drawer holds two piles of money, so your books should too. A dinar cash account and a dollar cash account, per branch if you have several, make the daily count simple: each pile must match its own balance.

Rule 3: Show customer and supplier balances per currency

If a customer owes you $1,200 and 500,000 IQD, show both. Combining them into one number at today's rate hides what the customer actually agreed to pay, and leads to arguments when the rate changes. Statements should list each currency separately.

Rule 4: Use exchange rates only where they are needed

You need a rate when one currency is genuinely exchanged for another, for example when a customer pays a dollar invoice in dinars or you change money at an exchange office, and when you prepare reports that bring everything together, such as profit and loss. Record the rate used on that transaction, with its date. Then any difference between the rate on the invoice date and the rate on the payment date shows up as an exchange gain or loss, instead of quietly disappearing into your margins.

Rule 5: Choose your reporting currency

Financial statements need one currency to add everything up. Many businesses here choose dinars because tax and official records use IQD; importers often prefer dollars because their costs are in dollars. Either is fine, as long as you choose once and stay consistent.

Rule 6: Count and reconcile every day

At the end of each shift, count each currency separately and compare it with the system. Small differences found the same day are easy to explain. Differences found at month-end rarely are.

How AlmasWare handles it

In AlmasWare ERP every invoice, payment and expense keeps its own currency. Cash accounts are kept per currency, customer statements show dinar and dollar balances side by side, and with full accounting switched on you can record exchange rates and see financial statements across both currencies. See how accounting works or book a demo.

In short

• Record amounts in the currency they happened in.
• Keep separate cash accounts for IQD and USD.
• Show customer and supplier balances per currency.
• Record the exchange rate when money is actually exchanged.
• Pick one reporting currency and stick with it.
• Count each currency every day.