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LilyLupin
Level 1

Difference in currency exchange rate from the time a bill is entered and paid

At my firm we often receive bills in foreign currencies from vendors. When we go to pay the bills in QuickBooks the exchange rate has frequently changed from what it was when we received the bill. So we pay the bill and now it either looks like we haven't paid the bill in full or it looks like we've overpaid. 

This is further complicated by the fact that we include 'billable' bills on the invoice to our clients. Our process looks like this: We receive the bill and then invoice our clients first for the amount of the bill and then after the client pays us we pay the vendor. In that time the exchange rate has changed several times and the amount we are paying is no longer the same as the amount of the bill on the invoice. I'm considering changing the amount of the bill to reflect the rate on the date we pay it???

If you can make sense of this somewhat jumbled question I'd really appreciate any advice on resolving this issue.

2 Comments
HoneyLynn_G
QuickBooks Team

Difference in currency exchange rate from the time a bill is entered and paid

Hi there, @LilyLupin.

 

Thank you for visiting us here in the Community. I can share some insights about the currency exchange rate in QuickBooks Desktop.

 

Currently, the option to update the exchanging rates on existing transactions is unavailable. This is of course by design to maintain the integrity of your accounting data, otherwise, it would get scrambled regularly.  However, I know some applications you can integrate with QuickBooks to do this.

 

You can visit this link to have an overview of the applications you can use: https://quickbooks.intuit.com/apps/.

 

Another option is changing the amount of the bill to reflect the rate on the date you paid the transaction.

 

That should be enough information to get you on the right track, LilyLupin.

 

Let me know if you have other questions about the currency feature in QuickBooks. I'm still here to help you further. Have a good one!

Anonymous
Not applicable

Difference in currency exchange rate from the time a bill is entered and paid

Based on just the first half of your question I gather that you are not using the QB 'multi-currency' system.  If your version of QB includes multi-currency then you  should turn it on and start using it - that will resolve most of these issues.

If you do not have a multi-currency system then you have to manually fake it - which leads to the issues you find.

One workaround option is to record a foreign vendor bill as 2 separate bills - one bill for the actual amount in foreign $ and a separate bill for the exchange amount.  You can pay both bills with a single local cheque, any any apparent difference is leftover on the exchange bill - where it can be cleaned up later. This wont work well for inventory item purchases.

Another option is use single vendor bills and add a second 'exchange' bank account to pickup any differences.  If the vendor bill seems short then make a second dummy payment from this account to close it - it it seems overpaid then refund the difference into the exchange account.  Later clear the exchange account to FX exchange costs.  

 

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