You are provisioning in the Caribbean with a euro-denominated float and a euro card. The vendor prices in US dollars, the taxi driver wants cash, and the card terminal cheerfully offers to bill you in euros "so you know what you are paying". Every one of those decisions moves money, and the difference will land in your reconciliation whether you noticed it or not.
Record the Rate You Actually Got
The single most common multi-currency error is booking spend at the headline mid-market rate you saw on your phone. You never get that rate. Book the effective rate, derived from what actually left the account.
Worked example — card purchase. You buy USD 287.00 of guest supplies. Your euro card is billed EUR 265.48.
- Effective rate = 287.00 ÷ 265.48 = 1.0811 USD per EUR
- At the mid-market rate of 1.0950 the cost would have been 287.00 ÷ 1.0950 = EUR 262.10
- Cost of the spread and fees = 265.48 − 262.10 = EUR 3.38, about 1.3%
You post EUR 265.48, because that is what the yacht paid. The USD 287.00 and the rate 1.0811 go in the notes.
Worked Example — Cash Exchange
You change EUR 1,000.00 at a bureau and receive USD 1,050.00.
| Field | Value |
|---|---|
| EUR given | 1,000.00 |
| USD received | 1,050.00 |
| Effective rate booked | 1.0500 USD per EUR |
| USD 210.00 taxi, converted at booked rate | 210.00 ÷ 1.0500 = EUR 200.00 |
| USD float remaining after taxi | 840.00 (= EUR 800.00 at the booked rate) |
Every USD spend from that tin is converted at 1.0500, not at today's screen rate, until the tin is empty. That is what keeps the currency column reconcilable.
Dynamic Currency Conversion — Always Decline
When a terminal abroad asks whether to charge in your currency, that is dynamic currency conversion (DCC). It hands the conversion to the merchant's provider, typically at a worse rate, often 3 to 6% adrift. Always choose to be billed in the local currency and let your own bank convert. It is a small habit that quietly protects the budget on every single transaction.
Practical Rules
- Keep a separate cash tin and cash book per currency. Never merge them "for simplicity".
- Record on every entry: local amount, currency, effective rate, base-currency amount, source of the rate.
- Keep the bureau receipt or the ATM slip: it is your evidence of the rate.
- Bank fees, ATM fees and card fees are real spend. Code them (usually to bank charges), never absorb them silently.
Onboard Notes
- Exchange gains and losses are normal and expected. Hiding a small FX loss by fudging a rate turns an accounting fact into a falsified record.
- Do not exchange large sums with anyone unofficial for a better rate. It is how crew get drawn into money-laundering exposure.
- Currency treatment for charter and tax purposes is decided by the management company and the yacht's accountants, not by you.