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.