With enabling multi-currency feature QuickBooks can be used for tracking various transaction that is done in foreign currency. With multi-currency, you can assign a specific type of currency to a particular profile and account. After you successfully Organise Multi-currency In QuickBooks can be very useful for a business that deals with foreigners.
Organise Multi-currency In QuickBooks
The profile and accounts for which currency can be assigned-
- Accounts payable
- Accounts receivable
- Credit card account
- Bank account
- Price level
IMPORTANT: This particular feature is once turned on then cannot be turned off so make sure that you want this feature on your QuickBooks. Before proceeding further make a backup copy for your company file. Here are some crucial points you should remember-
- Some of the features in QuickBooks Desktop like “Statement Writer” & “Fixed Asset Manager” do not use the multi-currency feature and will not be affected if this feature is turned on.
- Some features like “Insights”, “Bill Tracker” & Income tracker will specifically not work if the multi-currency feature is being used. Other versions like QuickBooks Enterprise and QuickBooks Accountant will not be able to batch Delete or enter the invoices or any kind of void transaction.
- In time and expense window you cannot select multiple customers for invoices.
- Information will not be exchanged with QuickBooks mac and copying company files will not work either.
- With multi-currency, you cannot pay online invoices.
Step 1- Enable Multi-currency
- Open QuickBooks and open the Edit menu. Choose Preferences.
- Select “Multi-currency” from the left pane of the window.
- Switch to “Company Preferences” tab and choose “Yes, I use more than one currency”.
- Use the dropdown to select the home currency.
- This will be the initial step to help you to Organise Multi-currency In QuickBooks
Step 2- Adding a foreign currency to customers and vendors.
Only one currency can be added to a specific customer or a vendor profile but in case you want to add new currency then you must create a new profile to do so.
- Once you have turned on this feature all your existing vendor and customer profiles will be assigned to your home currency. The currency can be changed for those names who do not have any transaction recorded against their account.
- While closing or opening the balance only uses the home currency. Continue to use the home currency until the currently open transaction is closed. Use foreign currency for only new purchase or sale.
- Customer and vendor centers can be used for creating a foreign currency account. Do not use the same for home currency and foreign currency account change the name slightly to avoid errors.
Follow these steps in order to add a foreign currency Customer/Vendor.
- Open the Vendors (or customer) menu, choose “Customer center(or vendor center).
- Choose “New Customer:job”(or New vendor) in Center. Use the dropdown menu to select a New Vendor(or customer).
- Simply assign a Vendor(or customer) name and then select the currency you want to use.
- Click on OK.
Step 3- To add a foreign currency Account Follow the steps mentioned below-
- Open the LIsts menu in QuickBooks and then select “Chart Of Accounts”.
- Inside the Chart of account apply right click anywhere and select option “NEW”.
- Now you will be asked to select a specific account type and assigning name to it.
- After you are done click on “Save & close”.
Step 4- Updating the exchange rates
QuickBooks Desktop only allows you to download the rates for active currencies which means that only if your home currency is us dollar you can download the rates.
Download the exchange rates-
- Open the lists menu in QuickBooks and then select the option “Currency Lists”.
- Choose the activities button and then click on “Download exchange rates”.
Manual entry for exchange rates-
- Open the lists menu in QuickBooks and select the option for “Currency Lists”.
- Apply double click on any currency.
- Now you will be inside the Edit currency window. Update your currency exchange rate for a specific date.
- Doing this will help you to Organise Multi-currency In QuickBooks successfully
- Incase you are not able to do it due to any issue you may contact QuickBooks Technical Support team to get assistance.