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Intuit

Receiving and making payment for a foreign invoice/ bill with a foreign currency

QuickBooks Online is able to issue Invoice/Bill in different foreign currency. However, when recording payment received/made, we are only able to use the home currency bank account or the bank account with the currency that matches the Invoice/Bill.

Please note that the Multicurrency feature has to be turned on in order to receive and make payment with a foreign currency.

For example:
Customer A was issued an Invoice in USD and the home currency for the business is SGD. However, the customer pays us in EUR.

We’ll first have to create a new dummy bank account in the home currency to facilitate the movement between 2 different foreign currencies

  1. Select the Gear icon, then select Chart of Accounts
  2. Select New
  3. Under Account Type column, select Cash and cash equivalent. Under Detail Type column, select Cash on hand. And under Name column, type in Dummy Bank
  4. Before saving and closing, make sure that it is in the home currency (which is SGD in this case)

We’ll first have to record payment of the foreign invoice.
In the Receive Payment module, set the Deposit To field to Dummy Bank
Before saving the transaction, take note of the home currency (SGD) amount displayed at the bottom right.

For example, I received USD 1000 payment for the invoice and this gives me SGD 1300

Next, we’ll have to transfer this SGD 1,300 from Dummy Bank to the EUR bank account.

  1. Select + New.
  2. Select Transfer.
  3. Under Transfer Funds From column, select Dummy Bank from the drop-down arrow.
  4. Under Transfer Funds To, select EUR Bank from the drop-down arrow.
  5. Under Currency column, select SGD from the drop-down arrow.
  6. Under Transfer amount column, type in 1300
  7. Under Exchange rate, the exchange rate will automatically appear which is 1.625 in this case. You can manually change the rate.

To pay for this USD invoice, the customer paid EUR 800. To get EUR 800 from SGD 1300, we divide 1300 with 800 to get 1.625 as the exchange rate.

To record payment for a foreign bill with a different foreign currency, the idea above applies. Use the Dummy Bank account to make payment for the foreign bill. Next, transfer money from the foreign bank account to the Dummy Bank account.

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