The organization usually processes foreign bank transactions in a currency other than the U.S dollar. If you are using the QuickBooks accounting software, then for this purpose multi-currency feature lets you record such transactions in foreign currencies.
Hence if you have bank accounts that use foreign currencies then you need to enable the multicurrency option to track such transactions, exchange rate gains & losses. The below article is rounded up with the information guide to solve QuickBooks multi currency problems & to setup and use multi-currency in QuickBooks.
What are the things you need to consider before turning on Multicurrency in QuickBooks?
Understand the QuickBooks Currency Settings:
- You need to know once you turned on the Multi-currency option then you can no longer disable it. Ensure that you have created a backup of the QuickBooks company file.
- QB add-ons like Statement writer & fixed Asset Manager use U.S currency. However, they won’t get affected after enabling this option
- You won’t be able to use income tracker, insights & bill tracker, to enter or delete invoices in batch, choose multiple customers in the Time & expenses page, exchange information with QB for Mac, and online invoice payments.
Read More: How to fix when balance sheet out of balance in QuickBooks?
How to set up and use multiple currency in QuickBooks?
Here is the list of steps you need to setup multiple currencies in QuickBooks:
Step1- Turn on the Multicurrency option:
- Locate the Edit button then choose Preferences
- Click on the Multiple Currencies tab
- Select Company preferences option then hit Yes, I use multiple currencies
- Hit the drop-down button then choose the home currency
Step 2- Embed the foreign currency vendors and customers:
- You can only allot one currency per vendor or customer profile.
- You require creating new profiles to add a new currency.
- Make sure you have assigned the home currency to all the existing vendors and customers.
Here is the list of steps to embed foreign-currency customers or vendors:
- Locate the menu labeled Vendors then hit Vendor Center
- Click the Vendor center option
- Choose the New vendor on the drop-down button
- Click new vendor
- Align a vendor name & currency
- Click OK
Step 3- Set Foreign-currency accounts:
You can only allot a currency for the associated account. For this, you need to make new accounts for foreign currency transactions. Here are the steps:
- Click menu labeled Lists then choose Charts of Accounts
- Give right-click anywhere in the chart of accounts
- Hit New option
- Select the suitable account type and then give a name
- Hit Save & Close tab
Step 4- Exchange rates updates:
Rates of the QB desktop download for currencies. Moreover, you can simply download the rates if the home currency is set in US dollars. Here is the list of steps to download the rates of exchange:
- Click the Lists option then choose the currency list option
- Choose the button named Activities and then click Download Latest Exchange Rates
Step 5- Foreign-currency transaction creation:
- In this, you need to use the foreign-currency accounts or names you previously added for the foreign-currency transactions.
- If the existing customers have an open invoice for home currency then use them instead of the new foreign currency.
- Use the home currency to complete the transactions
- You don’t need to add a currency to sales & purchase transactions as they allow the customer currency that you fill on the form.
- Exchange rates are a component of the transactions to signify the transaction home currency value
- Reports contain the home currency instead of the currency in transactions.
Here the article came to an end! Now you confidently set up and use the Multi-currency feature in QuickBooks. If you have further questions regarding adding an account for foreign currencies, then give a call to QuickBooks professional team. Moreover, you can use a live chat or send an email to clear all the queries.
Question: How would I manually fill exchange rates in QuickBooks?
- For this, you need to open the lists menu
- After this click currency list
- Now double-click on the currency
- It will display a window named edit currency
- Now update the specific date in the currency exchange rate
Question: What would I need to do to track foreign transactions if I’m using a simple start?
In this case, upgrade QB’s online subscription to proceed with foreign currency transaction tracking.
Question: Can I access the multicurrency feature in QuickBooks advanced edition?
Of course, this option is available in QB online essentials, plus & Advanced
Question: What types of profiles and accounts do I assign with the Multicurrency feature?
Here is the list of accounts you can use to allot a specific currency type:
- Price levels
- Credit card accounts
- Accounts receivable
- Bank accounts
- Accounts payable
Question: How would I add currencies to set up the Multicurrency feature?
Ans: Follow the steps below:
- Choose Settings tab
- Click Currencies
- Hit Add currency option
- Choose the new currency using a drop-down button named Add currency
- Click Add
- The currency you have chosen is embedded in the currency list
Question: Can I delete currencies in QuickBooks?
Ans: Yes, follow the steps below:
- Click on the Settings tab
- Choose Currencies
- Hit on the icon named Action column
- Choose Delete option
- Click the Yes button to confirm that you are ready to delete
- The currency gets cleared from the currencies list
Question: I have 2 bank accounts GBP & USD, so I need to record foreign currency payment against the invoice raised, I want to match USD invoice with USD payment. How can I do that?
Here I will let you know how do you make a foreign currency adjustment in QuickBooks, you need to facilitate the movement between 2 different foreign currencies, so you have to create a new dummy account in the home currency.
- Click on the Gear icon, then select Chart of Accounts and click on New
- Select Cash in bank and in hand from the Account Type column. Scroll down and choose Cash on hand under Detail Type. Type in Dummy Bank under Name column.
- Be sure to save and close it in your home currency (in this case, GBP).
First, you must record the payment of the foreign invoice. Set the Deposit To field in the Receive Payment module to Dummy Bank. Note the amount displayed in your home currency (GBP) at the bottom right of the screen before saving the transaction.
Our next step is to transfer the GBP amount from Dummy Bank to the USD account.
- Click the + New icon and select Transfer.
- Choose Dummy Bank in the Transfer Funds From column.
- In the drop-down arrow next to Transfer Funds To, select USD Bank.
- Click on the drop-down arrow next to Currency and select GBP.
- Type the amount in the Transfer amount column.
- An exchange rate will appear automatically under Exchange rate. The rate can be changed manually as well.
Let me know if you have any questions related to QuickBooks multi currency removal. Our team right here to help you with the multi currency support & other payments errors.
Question: Can QuickBooks enterprise handle foreign currency transactions?
Yes, you can add transactions in another currency and QuickBooks handles all currency conversions. You can manually enter in your own exchange rates for foreign currency transactions. If you unable to do that, we can help you. Just speak with our LIVE CHAT team.