By configuring currencies and taxes properly, you ensure accurate reporting, correct reimbursement flows, and compliance with your company’s accounting setup.
Configure currencies for legal entities
Each legal entity in your company must have a defined operating currency.
- In your sidebar, go to Settings → Company details
- Select the legal entity you want to configure by clicking View legal entity
- Scroll to the Currency information section
- Set the operating currency
Keep in mind that changes in currency do not include conversions - the operating currency is simply established for that legal entity.
Currencies in expenses
Expenses include two currency fields:
- Document currency - The currency in which the receipt or invoice was issued. Multi-currency is supported by default.
- Reimbursable currency - The currency in which the reimbursement will be made. This is automatically set to match the legal entity’s operating currency.
Factorial automatically applies conversion between currencies using the average exchange rate of the transaction date (document date or payment date).
Configure taxes
You can also configure the taxes that apply to your company’s operations.
- In your sidebar, go to Settings → Accounting
- In the Taxes section, click on the Taxes box
- A list of existing taxes will appear, including their type and associated country code
- Use the three-dot icon to edit or adjust an existing tax.
- Click + Add tax type to create a new one.
Adding a new tax type
When creating a new tax type, fill in the following fields:
- Tax name
- Country
- Type (e.g., VAT, Income Tax)
- Values (%) and descriptions (you can add multiple)
- Legal entity and corresponding ledger account
If no ledger accounts are available, import them first through the Chart of accounts section before assigning them to your tax types.
Tips and Best Practices
- Set currencies as soon as you create a new legal entity.
- Review taxes periodically to ensure they align with local regulations.
- Use clear tax names (e.g. “Spain – VAT 21%”) for easier reporting.
- Keep the Chart of accounts updated before assigning taxes.
FAQ
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Can I change a legal entity’s operating currency after it’s been set?
Yes, but the change does not convert existing data. It only applies to future expenses and reimbursements.
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Can I assign the same tax to multiple legal entities?
Yes, as long as you link each entity to the correct ledger account.
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What happens if I don’t configure taxes?
Expenses and reimbursements won’t include tax details, which may affect compliance and accounting accuracy.