Not necessarily a good practice but we want to see how the rate change impacts our reporting. Now, let’s pay the supplier, many months later. This is automatically set up by QuickBooks. The accounts payable accounts are separated by currency. It can be a little bit confusing because of the notation of the account, but the amount is displayed in Canadian dollars. We have accounts payable, it says USD, for $13,000. Let’s have a look in the balance sheet also. We now have an expense for supplies of $13,000. Let’s have a look in the profit and loss. All reports are displayed in the home currency. Note that this is the amount that will appear in all of our reports. The supplies purchased, $10,000 USD is now calculated as $13,000 CAD.
Note that there’s a warning, I’m using this rate for this transaction only. For this exercise, I’m going to choose a nice round 1.3 so it will be easier to track the movement later. I can now either use the exchange rate provided by QuickBooks or adjust it. I’m going to enter a bill from a US dollar supplier on June 30th. So I’m going to follow through so you can see how those transactions work. Multicurrency in QuickBooks Online works seamlessly if you just know how to use it. If you’re not familiar with QuickBooks Online, you might be tempted to just enter everything with a 1 for 1 exchange rate thinking that you can recalculate and can clear it up at your end, or if you’re an accountant that you clear it up at year end. Today, I’m going to show you how currency variations are calculated in QuickBooks Online and how you can assign different currencies to transactions at the time you record them.
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