Multi-currency in QuickBooks Desktop is a feature that helps you to track transactions in foreign currency. We often see when we are doing business from an outside country we get through so many problems. We have to do business in different currencies with different people. Here QuickBooks become helpfull for us this helps in tracking multiple currencies.
Set up of Multi-Currency in QuickBooks
Learn here to set up and use QuickBooks Multicurrency. But you need to backup your company file before turning on multi-currency in QuickBooks. Because once you turn on Multicurrecny, you cannot turning it off. Now you should also consider these points given below before turning on the Multicurrency feature in your QuickBooks:
- There are some QuickBooks Desktop add-ons tools/features that will use U.S currency continuously that will not affect by activating multicurrency in QuickBooks. such as Fixed Asset Manager and Statement Writer.
- You are no longer to use Insights, Income Tracker, and Bill Tracker after enable the multicurrency feature. And also you cannot allow entering delete/void transactions or invoices in QuickBooks Enterprise and Accountant.
- For Time and Expenses window, you are not allowed to select multiple customers in the Invoices.
- You cannot move or exchange data for Mac from QuickBooks Desktop.
- Online payment of invoices doesn’t work with multiple currencies.
Now we will see some additional fields and levels that have been added by quick books are as follows-
- A currencies list is created by Quickbooks, it can be seen by clicking Gear > currencies (under lists).
- You can see that after adding the name of consumer and supplier we can proceed for choosing currencies.
- In the chart account, the currency column appears. We should keep in mind after posting the transaction by account we can’t change the currency.
- At last but not least is a payment, deposit, sales tax and the due columns on the bank all present credit account histories show the currency appearance.
Uses of Multi-currency in QuickBooks
- Click the gear icon, select company settings, select advanced and then the currency
- Check the multicurrency checkbox to turn on the multicurrency feature. Once it turned on, it can be turned off
- To manage the list of currencies available, click the gear icon, select list, and select currencies
- Once you set up your list of currencies, set up a foreign currency account in QuickBooks
- Click the Gear icon, select chart of accounts and select new
- Fill the required fields on the screen and select the currency you want in the currency dropdown list
- Click Save and close to save the new account
EXCHANGE RATES: MULTICURRENCY
Now we will take some steps so that the exchange rate should be kept accurate-
- The exchange rates are being downloaded by QBO every four hours so that it could be updated in QBO.
- Wall Street on-demand service is similar to source
- After editing exchange rates you can use another source if u want.
ENABLE MULTI-CURRENCY in QuickBooks
- You can select the company setting after clicking on the gear icon.
- Go and select Advance.
- You have to scroll down to currency and then click at pencil item.
- The Multicurrency checkbox will be selected.
- The Click Save will we select at last.
AFTER TURNING ON MULTICURRENCY WORK DONE BY QUICKBOOKS.
A currency list that holds the currencies of many other countries is added by QBO. It can be added easily if you are not getting the currency that is asked by your client.
Customer and supplier to currency field and to some balance sheet accounts, this shows how the transaction could be done.
Here we will add a new field to the transaction so that it could be easily displayed by the customer or supplier currency.
Charts of columns are added by currency by a currency column.
Home currency is being assigned by all accounts, After enabling multi-currency.
Advantages And Disadvantages of Multi-currency
FOREIGN TRANSACTION FEES GET ELIMINATED.
Nowadays we all do international transactions and send money from one country to another country. Due to this, we pay a lot in the form of a foreign transaction fee. So in multicurrency, there is no need to pay any transaction fee. By taking this big step foreign customers become more loyal. And they will also appreciate saving their money and keep their trust in you.
IMPROVES CUSTOMER LOYALTY
As we know that being loyal is how much important in today’s life. And when the customer has no confusion regarding bill payments and they get cleared on this, that how much they have to pay how much you have charged if they get cleared on this point trust me this will boost your customer’s loyalty. After that, they will make their trust in your business and never think that they are being looted by you.
When a customer is paying you money and he is in confusion regarding his chargebacks. At the same time make it clear otherwise it can create a big dispute between you and them. Because this can lead your business in cashback. This is not only annoying can also waste your time.
If you are doing any business and your transaction is being done in the same currency that is used by your competitors. In this case, then give the upper hand.
This can only be used by foreign people in other countries
MULTI CURRENCY TRANSACTION AND WORKFLOW.
The regular transaction is the same as creating multi-currency transactions. The transaction must be part of the exchange rate so that it can be edited. Editing doesn’t require when the exchange rate is new.
REPORTING ON MULTI CURRENCY TRANSACTION.
The several presents reports that help your client to report on the multicurrency transaction are contained by QuickBooks. Multi-currency could be added so that you can report about the currency that is in your home.
THE PRESENT REPORT INCLUDE FOLLOWING:
Realized EXCHANGE GAINS AND LOSSES:
You will face profit and loss when you are going to work with multiple currencies. To see how much you have gained or lost on the multi-currency transaction you have to create a report.
UNREALIZED EXCHANGE GAIN OR LOSSES:
The transaction that is affected by unrealized gains or losses is the only day in which you entered or created the report.