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

LilyLupin · ‎January 14, 2019

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.

HoneyLynn_G · ‎January 14, 2019

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 · ‎January 14, 2019

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.

jme702 · ‎April 20, 2022

How we do it is by using a blended rate. Here is an example:

1. We pay a 50% deposit to our vendor at 1 exchange rate.

2. We don't the other 50% until we receive the item so the exchange rate is now different.

3. So to get the correct exchange rate we use the following formula:

50% deposit payment in foreign currency times "x" rate = amount in USD

50% balance payment in foreign currency times "x rate = amount in USD

£100 x 1.21 = $121.00

£100 x 1.31 = $131.00

Total

£200 / $252 = 1.2600 (blended rate)

Use the blended rate as the total paid and it should balance it out.

Knightskye75 · ‎October 15, 2022

I am not sure this question got answered. I use multi-currency. I enter a bill in QBO telling QBO exactly what the exchange rate was to get the correct info entered into the bill. On the screenshot below I enter a product that costs us CAN$350.00. The amount we paid was $255.39. When the bill is entered QBO says the exchange rate is $0.728157 to $1 US Dollar. This calculates to an incorrect total of US$254.85. So I over write the exchange rate and enter $$0.7296857143 to get the correct amount that we paid of $255.39. I save the bill which I would think should save the information I enter.

But it does not. When I click "mark as paid" QBO over writes the exchange rate again which, again, creates an incorrect amount of $254.85. I have to reenter the correct exchange rate once again to get the payment correct. Am I doing something wrong?

Eileen_Hazel · ‎August 06, 2024

I'm having a similar issue with syncing a bill and payment over from BILL to QBO, that was paid in Australian dollars.

Bill and Payment amount in Australian Dollars: $9282.50.

Bill date: 7/31/24

Payment date: 8/2/24

The issue is that when this bill and payment synced to QBO, QuickBooks did a currency conversion, but used two different conversion rates for the bill and the payment.

Bill: $9,282.50 AUD x 0.6665778 = $6187.51 USD.

Payment: $9,282.50 AUD x 0.6692913 = $6212.70 USD.

How do I resolve this?

RogelioL · ‎August 06, 2024

Let me help you resolve this, Eileen.

To begin with, please know that QuickBooks will depend on what that specific third-party app provides us.

Also, the difference between the conversion rate for your Bill and Payments is natural due to QuickBooks updating the currency rates every 4 hours.

Since you want the currency to have the same conversion rate, I suggest editing the payment transaction to match your preferences.

Additionally, you can check out this article to learn how to send your expense receipts and bills: Email receipts and bills to QBO.

Let me know if you have further concerns about your bills and payments. Keep safe.

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