Before You Begin

This guide requires a QuickBooks Online Plus or Advanced subscription. Ensure your primary currency is correctly set.

Overview

30 min
Setup Time
Advanced
Difficulty
Monthly
Maintenance

What You’ll Learn

  • How to enable multi-currency in QuickBooks Online
  • Setting your home currency and adding foreign currencies
  • Recording foreign currency invoices and bills
  • Understanding unrealized and realized foreign exchange gains/losses
  • Reconciling multi-currency bank accounts

1. Preparation Steps

Before enabling multi-currency, review these critical considerations:

Required Considerations

  • Cannot be turned off once enabled
  • Home currency cannot be changed after initial setup
  • All existing transactions remain in home currency

Recommended Actions

  • Consult with an accountant familiar with forex accounting
  • Back up your QuickBooks data before enabling the feature
  • Understand the impact on financial reporting and taxes

2. Understanding Key Concepts

You’ll encounter two main types of foreign exchange adjustments.

Realized vs. Unrealized Gains/Losses

These concepts differentiate when a gain or loss on foreign currency is recognized.

Realized:
  • Occurs when a transaction is settled.
  • Appears on your Profit & Loss report.
  • Impacts actual cash flow.
Unrealized:
  • Occurs on open invoices/bills or bank balances.
  • Appears on Balance Sheet (e.g., A/R, A/P, Bank).
  • Doesn’t impact cash flow until settled.

Exchange Rate Management

QuickBooks Online provides daily exchange rates from Thomson Reuters, but you can manually adjust them for specific transactions or periods if needed. Always verify the rates used for accuracy to ensure your books reflect the correct values.

3. Step-by-Step: Enabling Multi-Currency

This section outlines the workflow to activate and manage multi-currency within QuickBooks Online.

This process ensures your QuickBooks environment is ready to handle transactions in multiple currencies seamlessly.

Here is a sample code block to illustrate how a currency configuration might be represented.

{
  "home_currency": "USD",
  "foreign_currencies_enabled": true,
  "supported_currencies": ["EUR", "CAD", "GBP"]
}

4. Setting Up Foreign Currencies

  1. 1

    Enable Multi-Currency

    Navigate to the Gear Icon > Account and Settings > Advanced tab > Currency section. Toggle the “Multi-currency” option to ON.

  2. 2

    Set Your Home Currency

    Carefully confirm your home currency. Once set, this cannot be changed or reverted. This is crucial for all reporting.

  3. 3

    Add Foreign Currencies

    After enabling, go to the Gear Icon > Currencies. Click “Add currency” and select all the foreign currencies you plan to transact in.

Important: Once Enabled

After enabling multi-currency in QuickBooks Online, this feature cannot be turned off. Ensure your decision aligns with your business needs and future accounting strategy.

5. Recording Transactions & Reconciliation

Key Multi-Currency Workflows

  • Creating foreign currency invoices and bills
  • Recording foreign currency payments received/made
  • Reconciling multi-currency bank and credit card accounts
  • Generating foreign exchange gain/loss reports for review

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