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Multicurrency Transactions in QuickBooks

You have a few options regarding multi-currency transactions in QuickBooks.

First, Q/B does have a multicurrency feature that you may want to check out. Thoroughly research before implementing as you can’t reverse it (http://community.intuit.com/quickbooks/library/resource_centers/multicurrency). This is best implemented if you have frequent multi-currency transactions.

However, if you create the occasional invoice that gets paid in to you in foreign funds (for example Canadian dollars) into a US dollars bank account, then you can simply do this:

When you create an invoice in USD (US dollars), use one of the invoice lines to specify the conversion rate to CAD (Canadian dollars) and the converted amount of CAD that is due at the time of the sale. Specifiy as long as the customer pays the specified CAD amount within the invoice terms, they will have satisfied payment for the invoice regardless of the exchange rate. This makes things less complicated.

When you get the check for the specified CAD amount, receive payment on the invoice for the full amount of the invoice in USD, and allocate to Undeposited Funds account.

Then go to, Banking>Make Deposits and select the USD payment, then add a line to the Make Deposits screen to balance the amount that the bank actually deposited into your bank account based on their exchange rate at the time of deposit.

If it is a negative amount: allocate to a Expense account called Currency Conversion Expense. If it is a positive amount: allocate to an Income account called Currency Conversion Income.