Currency Settings for International Suppliers

Brendan7791 · ‎January 17, 2021

I'm trying to figure out which is the correct currency option to select when setting up new international vendors with multicurrency settings enabled on quickbooks online. Is it the currency that the vendor originally invoices me in or is it the currency in which the money actually leaves my accounts? For context my situation is below:

I have a supplier who is based in the United States and invoices me in $USD. I'm based in Canada and a pay the invoices online using a Canadian credit card that is set up in $CAD. The credit card company makes the conversion from $CAD to $USD, adds their fees, and when the time comes I pay the credit card bill from my bank account in $CAD. Meanwhile my supplier has received their equivalent $USD payment. On my bank feed in Quickbooks the amount spent for this transaction in my credit card account appears as the amount in $CAD, just as it appears on my credit card statement.

For this example when registering the vendor in Quickbooks would I set the vendor currency to CAD (what I paid in) or to USD (what they invoiced my in)?

Thank you.

LeithG · ‎January 18, 2021

Hi Brendan7791:

I would suggest the original supplier account be setup in the currency they invoice you in. When you pay via credit card, you would zero out the owing amount to them, and record it as a foreign currency owing amount to the credit card, then subsequently zero it out via your payment to the credit card company.

In this way, your net profit/loss on foreign exchange will be properly calculated by Quickbooks and show up on your Profit and Loss statement.

Rebecca R · ‎January 18, 2021

Hi there @Brendan7791 and welcome to the Community!

I love that you're looking for the best course of action to take when it comes to setting up your suppliers. This is important because once you set a currency on your supplier's profile, you can't change it. I'd like to expand on what @LeithG has shared in their response above and point you in the direction of some additional resources.

If your supplier bills you in a foreign currency, such as USD in this case, you want to set up their supplier profile in USD. Here's how to Add a supplier with a foreign currency in QuickBooks Online. Your home currency is presumably set to CAD, and if you record the bills you receive in USD, and their corresponding bill payments using your CAD Credit Card, QuickBooks will do the rest of the work for you.

Here's a fantastic article About Multicurrency in QuickBooks Online that features links to a ton of other great articles that I know you'll find helpful in navigating this new feature you're using. If you have more questions, don't hesitate to reach out again or reply to this thread. I'm happy to support you.

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