cancel
Showing results for
Did you mean:
Intuit

# Learn about exchange rates in QuickBooks Online

Learn how QuickBooks uses exchange rates for foreign currency transactions. This applies to QuickBooks Online Essentials, Plus, and Advanced users.

When you turn on multicurrency, QuickBooks uses exchange rates to get the home currency values of your foreign currency transactions.

Note: QuickBooks downloads and uses exchange rates from IHS Markit. If you need to, you can enter and use your own rates.

## How QuickBooks uses exchange rates

In QuickBooks, the exchange rate is the number of home currency units it takes to get 1 foreign currency unit. QuickBooks uses exchange rates to show how much a foreign currency transaction is in your home currency value.

QuickBooks also uses exchange rates for your reports. It converts foreign currency amounts to home currency values so your reports include all transactions. This makes sure you have a better view of how your business is doing.

Here’s an example of how QuickBooks uses an exchange rate on a foreign currency invoice:

• Home currency: US dollar (USD)
• Exchange rate: 1 Canadian dollar converts to 0.79 US dollars (1 CAD to 0.79 USD).

Based on IHS Markit exchange rates, 1 Canadian dollar (foreign) is equal to 0.79 US dollars (home). If the invoice amounts to 20 Canadian dollars:

• The invoice’s home currency value is 15.77 US dollars: 20 x 0.79 = 15.77.
• Your profit and loss report shows an income of 15.77 US dollars.

### Currency amounts in foreign currency transactions

When you enter foreign currency transactions, QuickBooks shows 2 different amounts:

• Total foreign currency amount. This is the total foreign currency amount based on the home currency rates of the products and services. QuickBooks multiplies the product or service rate by the exchange rate.
• Total home currency amount. This is the total home currency value of the transaction. QuickBooks multiplies the total foreign currency amount by the exchange rate.

From the previous example, you see the following amounts:

• Total = 20. This is the total foreign currency amount.
• Total (USD) = 15.77. This is the total home currency amount.