In QuickBooks Online, exchange rates are recorded as the number of Home currency units it takes to equal 1 Foreign currency unit. The Foreign unit is always 1 unit, and the exchange rate is always calculated as the number of Home currency units that equal 1 Foreign currency unit.
|Note: Make sure Multicurrency is turned on to add an exchange rate. The Multicurrency feature and foreign currencies are available in QuickBooks Online Essentials, Plus, and Advanced.|
Exchange rates and transactions
Foreign transactions have two values:
- Value in the Home currency: The Home currency value is the total amount of the transaction multiplied by the exchange rate. Your Home currency is the currency of the country where your business is physically located.
- Value in the Foreign currency for the customer or vendor: The Foreign currency value is the products or services in the transaction multiplied by the exchange rate.
|Note: QuickBooks Online uses the most recent exchange rates from Markit.|
Exchange rate example
The following example illustrates how the exchange rate is calculated:
- Home Currency: Canadian Dollar (CAD)
- Foreign Currency: US Dollar (USD)
- Exchange Rate: 1.2770
Since the foreign currency is always 1 unit, the exchange rate is the number of CAD that equals 1 USD:
1 USD (Foreign) = 1.2770 CAD (Home)
For more information, see About Multi-currency in QuickBooks.