QuickBooks multicurrency is a powerful feature that helps businesses work globally with currencies. QuickBooks’s multiple currencies feature provides a reliable solution to this problem. The system automatically updates exchange rates every 4 hours through IHS Markit and ensures accurate international transactions.
This article explains what these features do and how they work in different versions. Managing international transactions with multiple currencies presents a complex challenge for businesses. Along with here, we describe this feature in both QuickBooks Desktop vs Online.
What is QuickBooks MultiCurrency?
QuickBooks multicurrency lets businesses handle multiple currencies in their accounting, bookkeeping, receipts, and payments. This feature helps you set specific currency types for different records and transactions.
With QuickBooks’s you can enable multiple currencies.
- Pay foreign vendors and suppliers in their local currencies.
- Accept payments from international customers in their native currencies.
- Convert currencies automatically for non-home currency transactions.
- Put payments in banks with different currencies.
- Give employees their pay in foreign currencies.
- Set up new customers and vendors with their preferred foreign currencies.
The system gets exchange rate updates every four hours from IHS Markit. Your conversions stay accurate without any manual work.
Benefits of QuickBooks Multicurrency in QB Online
- You can simply record the transaction in foreign currencies. This is convenient if your business has international customers or suppliers. The exchange rates are automatically updated and used for your transactions.
- Whenever you issue invoices, bills, or payments in a foreign currency, QuickBooks Online instantly converts the sum to your home currency using updated exchange rates. This reduces errors in currency conversions.
- QuickBooks Online will automatically update exchange rates (from a reliable source such as XE.com or OANDA), so your conversions are current. This is time-saving for companies that must monitor numerous exchange rates.
- You are able to prepare financial statements in your local currency or in foreign currencies. For instance, profit and loss statements, balance sheets, and other financial statements may indicate the effects of exchange rates.
- You can assign specific currencies to individual customers and vendors, allowing for clear and easy tracking of outstanding balances and transactions in different currencies.
Benefits of QuickBooks Multicurrency in QuickBooks Desktop
- QuickBooks Desktop has more detailed control of currency options. For instance, you can set up several different currencies and have certain exchange rates for every transaction entered manually as required, having more flexibility compared to QuickBooks Online.
- Similar to QuickBooks Online, you are able to allocate particular currencies to customers and vendors. Still, QuickBooks desktop enables you to monitor your profits or losses on account of currency fluctuation more specifically, which proves useful for highly volatile markets.
- In QuickBooks Desktop, exchange rates can be manually set, and even historical exchange rates entered, which is an advantage for more sophisticated accounting requirements (for example, when handling long-term agreements or capital items).
- QuickBooks Desktop enables you to report more in-depth on currency gains and losses. These reports are essential for companies with overseas operations, as they can assist in making adjustments for currency variations in the financial reports.
- You are able to manage and monitor a number of currencies over accounts, assisting in monitoring your firm’s international transactions while allowing for clear accounting statements for every currency.
Limitations to Consider Before Enabling
- The biggest thing to know is that multicurrency cannot be turned off once enabled in either version. Your system will permanently change how it works after this decision.
- Some third-party apps might not work well with multiple currencies. Data migration from QuickBooks Desktop to Online often faces problems with this feature.
- You need separate accounts for each currency used in transactions. Income and expense accounts use your home currency no matter what. Account currency becomes fixed after the first transaction.
- Reports show amounts in your home currency. This might hide some details of international transactions. Understanding the exchange gain/loss account that QuickBooks creates helps you analyze finances accurately.
Setting Up QuickBooks Multicurrency QB Online
Setting up QuickBooks multicurrency functionality needs careful planning since this feature becomes permanent once activated. This guide will help you through the complete setup process for multicurrency QuickBooks Online.
Enabling the Multicurrency Feature
The first step activates this feature through your settings menu. Here’s the exact process:
- Click the gear icon and select Account and Settings.
- Select the Advanced tab.
- Scroll to the Currency section and click the pencil icon.
- Select your Home currency from the drop-down menu.
- Check the Multicurrency box and confirm you understand it can’t be undone.
- Click Save to complete the activation.
Note that the QuickBooks Online multi-currency feature becomes permanent after activation, so make sure you’re fully committed to this change.
Adding and Managing Foreign Currencies
The Manage Currencies link appears after enabling QuickBooks multiple currencies. This link directs you to the Currencies page.
- A new currency can be added by going to Settings.
- Then choose Currencies, and after that, Add currency.
- Choose from the dropdown menu, then select Add.
- Currency deletion is possible only when no transactions exist. The process requires selecting the arrow in the Action column, clicking Delete, and confirming your choice.
Creating Accounts with Different Currencies
QuickBooks Multicurrency allows the creation of bank and credit card accounts in foreign currencies.
- Go to Access Settings.
- Then, select Chart of Accounts and select New.
- Now, select an account type.
- Choose the foreign currency from the drop-down.
- Enter the starting date and opening balance.
- Click on Save.
- Your Chart of Accounts’ Currency column shows each account’s assigned currency. An account’s currency becomes fixed once transactions are posted.
Setting up Customers and Vendors with Foreign Currencies
New customers or vendors need a currency assignment during creation:
- Firstly, select New customer/vendor.
- Choose their currency from the Currency dropdown.
- Complete their information.
- In the last Click, save.
Existing customers’ or vendors’ currency cannot be changed if they have transactions. The solution involves making the current profile inactive and creating a new one with the desired currency. This approach preserves transaction history while enabling new entries in the correct currency.
Note that vendors needing payments in multiple currencies require separate profiles since QuickBooks allows only one currency per vendor.
Setting Up QuickBooks Multicurrency QuickBooks Desktop
QuickBooks Desktop handles multicurrency setup differently from its online version. Your business expansion into international markets requires specific steps to manage foreign currencies.
Enabling Multicurrency in Desktop Versions
Creating a backup of your company file is crucial since the QuickBooks Desktop multiple currencies activation becomes permanent. This safety measure protects your financial data if you decide to revert changes later.
The feature can be enabled through these steps:
- Go to the Edit menu and choose Preferences.
- Select Multiple Currencies from the left menu.
- Click the Company Preferences tab.
- Choose “Yes, I use more than one currency“.
- Select your home currency from the drop-down menu.
- Click OK and confirm your selection.
The activation comes with some limitations. Your system will disable features like Insights, Income Tracker, and Bill Tracker. The QuickBooks multiple currencies feature also makes batch processing and online invoice payments unavailable.
Adding Currencies and Setting Exchange Rates
Your foreign currencies need configuration after activation. Here’s how to access your currency list:
- Go to the Lists menu, then Currency List.
- Select the Activities button.
- After that, download the Latest Exchange Rates (only available with USD as home currency).
Manual Exchange Rate Updates
- Double-click any currency in your list.
- Modify the exchange rate for specific dates in the Edit Currency window.
- Save your changes.
These exchange rates help QuickBooks multicurrency convert foreign amounts into your home currency for every transaction.
Creating Foreign Currency Accounts
Your QuickBooks multicurrency setup needs dedicated accounts for each foreign currency.
- Go to the Lists menu and select Chart of Accounts.
- Right-click in the window and select New.
- Choose the appropriate account type (Bank, Credit Card, A/R, or A/P).
- Give it a name that shows the currency.
- Select Save & Close.
A/R and A/P accounts must match your customer’s or vendor’s currency. QuickBooks creates separate accounts automatically for each currency during transactions, which ensures accurate tracking in your accounting system.
Key Differences Between the QuickBooks Desktop and QB Online Versions
QuickBooks Desktop and multi-currency QuickBooks Online share basic multicurrency features but work differently in several ways.
QuickBooks Online: QuickBooks Online includes multicurrency in its Essentials, Plus, and Advanced subscriptions but not in Simple Start. The accessible interface makes it easy for new users to learn. Cloud access means you can work from anywhere with the internet.
QuickBooks Desktop: QuickBooks Desktop’s multiple currencies give you better reporting with over 200 pre-built reports compared to Online’s 100+ options. Desktop has stronger inventory tracking and built-in tools that would cost extra in Online.
Conclusion
QuickBooks multicurrency management needs proper planning before implementation. The feature provides robust tools for international transactions, but its permanent nature makes detailed preparation crucial. QuickBooks Online offers ease of use with cloud access, while Desktop provides more control over exchange rates and detailed reporting. Both require careful planning, as multicurrency activation is permanent, and separate accounts are needed for each currency.
