Convert foreign currency transactions using home currency in QuickBooks Online

In QuickBooks Online, when you’re dealing with different currencies, there isn’t a direct way to convert one currency to another. This is because QuickBooks uses the exchange rate relative to your home currency. 

Let’s say you have a transaction in Euros (EUR), but you want to convert it to US dollars (USD). To do this, you’ll need to:

1. Set up a foreign currency conversion account.
2. Convert the Euros to your home currency, such as Great British Pound (GBP).
3. Convert the amount from your home currency GBP to USD.

Step 1: Set up a foreign currency conversion account

This is the account that you'll use to temporarily hold the funds in your home currency.

1. Select the gear ⚙️ icon.
2. Select Chart of Accounts. 
3. Select New. 
4. For the Account type, select Cash at bank and in hand.
5. For the Detail type, select Cash on hand. 
6. Name the account “Foreign currency conversion”. 
7. Enter a description like “For transferring between multicurrency accounts”.
8. Select the home currency, in this case, we’ll use GBP (British Pound Sterling). 
9. Select Save and Close.

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Step 2: Convert the funds to your home currency

Now, let’s convert the funds from the original account to your home currency. QuickBooks will automatically handle the conversion when you transfer the funds to the account you created in Step 1. 

1. Select + New. 
2. Select Transfer. 
3. Choose the original account from which you want to transfer funds. 
4. Select the currency of the original account. For this example, we’ll use EUR.
5. Enter the amount you wish to transfer. 
6. In the Transfer funds section, select the Foreign currency conversion account you created in Step 1.
7. Select Save and close.

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Step 3: Transfer the funds to the desired currency

Once you’ve converted the funds to your home currency, you can transfer them to the currency you desire.

1. Select + New. 
2. Select Transfer. 
3. In the Transfer funds from section, choose the Foreign currency conversion account.
4. Select the desired currency you wish to convert to, in this case, we’ll use USD. 
5. Enter the amount. 
6. In the Transfer funds to section, choose the correct account in the desired currency where you want to deposit the funds. 
7. Select Save and close.

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Step 4: Check the transfer

1. Go to Banking.
2. Select the Bank transactions tab. 
3. Select the account where you transferred the funds in the desired currency. 
4. Doublecheck the account balance to make sure it’s accurate. 

You can also check in the your Chart of accounts: 

1. Go to Transactions. 
2. Select Chart of Accounts. 
3. In the search bar, enter the name of the desired currency account. 

Doublecheck the account balance and make sure that it has been deposited in the correct currency.

By following this approach, you'll have a clear record of all the multicurrency funds you've converted, right in your chart of accounts.

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