We want to use more than one currency type in our QuickBooks Online (QBO).
We can turn on the multicurrency feature in Company Settings. But, how do we use it?
Let’s say we have a customer that deals in Euros. They have a building in the U.S., but the main office is in a European country. When Rock Castle Construction does some remodel work for them, the payment will come from the main office, in Euros.
First, we need a bank account for the foreign currency.
You can see in the above graphic that now, with multicurrency turned on, there is an additional selection in account setup. What currency will be held in this bank account?
We are using Euros.
When we create new customers, we need to tell QuickBooks what currency they will be using.
Above is a screenshot of the customer setup window. Note that now it contains a field for the currency we will use with this customer.
This is how our customer list appears now with our new ‘Euro’ customer.
QBO keeps track of currency exchange rates. An invoice in Euros will not show the same total as an invoice in dollars. Yet, we need our reports to show our income and expense in dollars, even when we want to invoice in Euros.
Above is a graphic of an invoice for our Euro customer. QBO keeps track of current exchange rates. As a result, it can show us not only the total in Euros, but how many dollars that is as well.
Note the second accounts receivable account in the balance sheet shown above. QBO created that account on its own. We only needed to create the invoice for a Euro customer in order to trigger that event.
Note also that the amount is in dollars.
A look at the customer list would show the total amount due from the customer in Euros. That makes sense. If there were a question about the invoice amount, the answer would probably be best expressed in Euros.
But, it would make no sense to have the amount show in Euros on a report where other balances are reflected in dollars.
QBO is able to transition back and forth between the two, giving you the information you need about your international customer in the way that makes the most sense.