What Should Indian Businesses with Foreign Income Look for in Accounting Software?

Multi-currency accounting software should hold the foreign amount and the rupee value of each invoice, apply an exchange rate on the transaction date, restate open items at year end and record the exchange difference on payment. These steps follow AS 11 and the GST rate rule.

• Booking rate: A foreign currency transaction is recorded in rupees at the exchange rate on the transaction date (AS 11, paragraph 9).
• Year end: Receivables are monetary items, so an unpaid invoice is reported at the closing rate on each balance sheet date (AS 11, paragraphs 11 and 12).
• Differences: Exchange differences on settlement or restatement are recognised as income or expense in the period they arise (AS 11, paragraph 13).
• GST value: For services, the GST exchange rate is the rate determined under generally accepted accounting principles for the time of supply (Rule 34(2)).
• Income tax: Gains or losses from changes in foreign exchange rates are treated as income or loss and computed under the standards notified under section 276(2) (Income-tax Act, 2025, section 43).

Software records what you enter. Your accountant still decides the rate source and the treatment. For the entries themselves, see bookkeeping for exporters: recording foreign currency invoices.

Businesses with foreign income can use spreadsheets, desktop accounting packages, cloud accounting software or the finance module of an ERP. All can meet the rules if they hold the foreign amount, the rate and the dates. The table compares the types by what you have to check.

You evaluate accounting software by posting a sample foreign currency invoice, a year-end restatement and a part payment, then checking each result against the rules. The steps below use AS 11 and the GST rate rule as the test.

1. Post an invoice in a foreign currency and check that the tool stores the foreign amount, the rate and the rupee value (AS 11, paragraph 9).
2. Check that you can choose and record one rate source for all invoices, because GST uses the GAAP rate for the time of supply (Rule 34(2)).
3. Run a year-end revaluation on the unpaid invoice and confirm the difference is posted to a foreign exchange gain or loss account (AS 11, paragraphs 11 and 13).
4. Post a receipt that is lower than the invoice because of bank charges, and check that the charges can be booked as an expense so the client ledger closes at the full invoice value.
5. Check that bank advice or FIRA references can be attached to the receipt. See what is FIRA.
6. Check that invoice dates and export tax details can be reported for GST. The time of supply for services is the earlier of invoice date or payment where the invoice is issued on time (section 13(2)).
7. Check whether the tool can list invoices with their ages, so the nine-month realisation date and the EDF date can be monitored (Regulations 3(2) and 5(1)).
8. Check how you can export all data in a standard format for your accountant and for audit.

Features that map to a rule matter most: foreign currency fields, rate control, year-end revaluation, gain or loss accounts, GST fields and FEMA tracking. The table maps each feature to its basis. Prices and extras differ by provider and are outside the rules.

Incorrect records can misstate income, receivables and the exchange gain or loss, and can cause mismatches between books, GST returns and bank records. The responsibility sits with the business, not the tool.

• Income tax: Exchange gains or losses form part of income and must be computed under the notified standards (section 43(1)). A wrong rate shifts income between years.
• Assessment: If the Assessing Officer is not satisfied with the correctness or completeness of the accounts, an assessment may be made under section 276(3).
• GST mismatch: The value of exported services in GST returns depends on the rate for the time of supply (Rule 34(2)), so a different book rate creates a mismatch.
• Refund figure: For a GST refund, turnover of zero-rated services is the aggregate of payments received in the period (Rule 89(4)(D)).

Correct the entries, document the rate source and ask a chartered accountant how to treat prior periods. Keep the bank advice, invoice and ledger together.

Entries follow the invoice, the balance sheet date and the receipt. The table lists the trigger, the due date and where the record lives.

• Rupee-only books: Choosing software that cannot hold the foreign amount, so the original invoice value is lost.
• No revaluation: Skipping year-end revaluation, so unpaid invoices stay at the original rate.
• Mixed rates: Letting different users pick different rate sources.
• Fees netted: Netting bank charges against sales, so the client ledger never closes.
• No FEMA view: Ignoring invoice ageing, so the nine-month date passes unnoticed.
• Price-only choice: Comparing subscription prices without testing a foreign invoice end to end.

Every rule, deadline and form on this page is linked to its official source, checked on the dates below.

1. ICAI, Accounting Standard (AS) 11, The Effects of Changes in Foreign Exchange Rates (revised 2018), Paragraphs 8 to 13 and 40 (checked 9 Oct 2026)
2. Income-tax Act, 2025 (as amended by Finance Act, 2026), Sections 43 and 276 (checked 9 Oct 2026)
3. CGST Rules, 2017: Rule 34 (Rate of exchange of currency), Sub-rule (2) (checked 9 Oct 2026)
4. CGST Act, 2017: Section 13 (Time of supply of services), Section 13(2) (checked 9 Oct 2026)
5. IGST Act, 2017: Section 2 (Definitions), Clause (6) (checked 9 Oct 2026)
6. CGST Rules, 2017: Rule 89 (Application for refund), Rule 89(4)(D) (checked 9 Oct 2026)
7. FEMA (Export and Import of Goods and Services) Regulations, 2026, Notification FEMA 23(R)/2026-RB, amended up to 22 September 2026, Regulations 3(2), 4(2), 5(1), 6, 13, 19 (checked 9 Oct 2026)
8. CGST Rules, 2017: Rule 47 (Time limit for issuing tax invoice), Thirty days from the date of supply of service (checked 9 Oct 2026)