AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
For tax purposes the ATO expects a naira expense to be translated into Australian dollars at the rate for the time of the transaction, and it allows average rates in many cases. Where the ATO does not publish a rate for a currency, its rates page says you may use any reasonable externally sourced exchange rate. In practice that means choosing one documented source for naira, applying it the same way every time, and using the actual AUD cost where you converted the money yourself.
What the ATO actually asks for
Australian tax figures are in Australian dollars, so every naira invoice, salary or rent payment in your books has to be turned into AUD at some point. The ATO's translation (conversion) rules set out when the conversion happens and which rate applies. For an amount connected with a capital asset, the rule is the rate at the time of the relevant transaction or event. For ordinary income, it is the earlier of when the income is derived or received. The same page says average rates are allowed in many cases, which is what most small businesses with frequent foreign expenses rely on.
The ATO also publishes its own rates. Its foreign exchange rates overview, last updated 14 August 2026, lists monthly rates (posted at the start of the following month), end-of-financial-year rates at 30 June and end-of-calendar-year rates at 31 December. It does not publish daily rates and points readers to the Reserve Bank of Australia for those. For a currency that is not in its tables, the page says you may use any reasonable externally sourced exchange rate.
Three workable approaches for naira
1. The actual rate, where you converted the money
If your business converted Australian dollars to naira to pay a Lagos supplier, your bank or transfer statement shows exactly how many AUD left the account. That AUD figure is the cost of the expense, including any fee you choose to record separately. It is the easiest figure to defend because it matches money that actually moved.
2. A spot reference rate on the transaction date
If the expense was paid from naira you already held, for example from a naira account in Nigeria funded by local sales, nothing was converted that day. You then need a reference rate for the date of the expense. Because the official Nigerian reference rate is quoted in naira per US dollar, an AUD figure is usually built as a cross rate: the naira-per-dollar rate and a published US dollar per Australian dollar rate for the same day. See how Nigeria's official rate is set for what that naira figure represents.
3. A monthly average rate
Where there are many small naira expenses, a monthly average built from the same source is often more practical than a daily rate for each line. The ATO page allows averages in many cases; what matters is that the average is calculated from a reasonable source and the method is written down.
Why consistency matters
Changing the rate source from month to month, or picking whichever rate makes an expense look larger, is the pattern that is hardest to explain if your figures are ever reviewed. A short written policy avoids that. It does not need to be formal; a paragraph in your accounting file is enough:
- The source used for naira (for example, the official naira-per-dollar rate crossed with a published AUD/USD rate).
- Whether you use the transaction-date rate or a monthly average, and for which kinds of items.
- What you do when you converted the money yourself (actual AUD cost).
- Where the rate for each month is saved, so the calculation can be repeated.
Keep the rate evidence with the invoice. A screenshot or a downloaded rate table for the date is enough to show where a figure came from. For the wider record-keeping picture, see multicurrency bookkeeping in AUD and naira.
Worked example
Example with illustrative figures only. An Australian company pays a Lagos designer ₦1,800,000 in March from a naira balance it already holds. Its policy is to use a monthly average cross rate. Suppose the March average works out at ₦950 per A$1.
| Item | Figure |
|---|---|
| Naira expense | ₦1,800,000 |
| Policy rate (example March average) | ₦950 per A$1 |
| AUD recorded | 1,800,000 / 950 = A$1,894.74 |
| If instead the company had converted AUD that day and A$1,925.00 left its account | Record A$1,925.00 (actual cost) |
The difference between the two AUD figures is the cost of converting at that moment compared with the average. Neither figure is wrong; the point is to apply the method the policy describes.
Common mistakes
- Using the rate on the date you entered the bill into software rather than the date of the transaction.
- Mixing a provider's retail rate for some months and a reference rate for others without saying why.
- Forgetting that the ATO tables are for tax translation after the event, not a guide to when to convert.
- Not keeping the rate evidence. A figure without a source is difficult to support later.
This is general information about the ATO rules, not tax advice. A registered tax agent can confirm which approach fits your business.
Where Pryme fits
A Pryme Business Account keeps naira, US dollars, sterling and euros in the currency they arrived in, so the naira you pay suppliers from is clearly separated. When you convert with Swap, the rate and the fee are shown before you approve, which gives you the actual figure for your records. The Finance agent can prepare the conversion schedule for a person to check.
Questions people ask
What exchange rate does the ATO accept for naira?
The ATO's rates page says that for a currency not in its tables you may use any reasonable externally sourced exchange rate. Check the current monthly table first, then document the source you use.
Can I use one average rate for the whole month?
The ATO translation rules allow average rates in many cases. Use an average built from a reasonable source and apply it the same way each month.
Should I use the rate my transfer app gave me?
Where you actually converted AUD to naira, the AUD that left your account is the real cost of the expense and is the easiest figure to support.
Does the ATO publish daily exchange rates?
No. It publishes monthly and year-end rates and points to the Reserve Bank of Australia for daily rates.
Sources
- ATO: Translation (conversion) rules · accessed Oct 2026
- ATO: Foreign exchange rates overview (last updated 14 Aug 2026) · accessed Oct 2026
- ATO: Australian resident for tax purposes, foreign and worldwide income (last updated 15 Jun 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.