I have an invoice to a buyer in dollars, he transferred the payment in euros. The home currency is in dirhams. How do I link the payment to the invoice?

When recording invoice payments in QuickBooks Online (QBO), you can only utilize your home currency bank account or a bank account that matches the invoice’s currency. I'm here to explain how to manage payments in foreign currencies.

To start, you'll have to activate the Multicurrency feature to receive or make payments in a different currency.

Once the Multicurrency feature is enabled, you'll need to create a new dummy bank account in the home currency to facilitate the movement between two different foreign currencies.

Here's how:

1. In your QBO account, click the Gear icon at the top and select Chart of Accounts.
2. Click the New button.
3. Enter Dummy Bank for the Account Name and select Cash and Cash Equivalent for the Account Type.
4. Choose Cash on Hand for the Detail Type.
5. In the Currency section, ensure it is set to your home currency.
6. Click Save.

Next, we’ll record the payment of the foreign invoice. Here's what you'll need to do:

1. From the left menu, click the + New button and select Receive Payment.
2. Choose the customer name from the Customer dropdown.
3. Select the payment method (credit card, debit card, PayPal, Venmo, or ACH bank transfer) from the Payment Method dropdown.
4. Set the Deposit To field to Dummy Bank.
5. In the Outstanding Transactions section, check the box for the invoice you want to record the payment for.
6. Before saving the transaction, note the home currency (AED) amount displayed at the bottom right, then click Save and Close.

After that, we'll record a transfer from Dummy Bank to the EUR bank account.

1. Select the + New button from the left menu.
2. Choose Transfer.
3. Select Dummy Bank from the Transfer Funds From dropdown.
4. Select EUR Bank from the Transfer Funds To dropdown.
5. Choose AED from the Currency dropdown.
6. Enter the transfer amount in the Transfer Amount column.
7. The exchange rate will appear automatically. You can also manually adjust the rate.
8. Click Save and Close.

To learn more about this process, you can explore the article that covers receiving and making payments for foreign invoices or bills in a foreign currency from Singapore. This information is suitable for all regions.

If you want to track your own exchange rates for foreign currency transactions in your account in the future, please refer to the following articles:

• Enter and use your own exchange rates in QuickBooks Online
• Learn about exchange rates in QuickBooks Online

Need more support with managing customer payments in different currencies? Let us know in the comments, and we’ll be happy to assist you!

Thank you. Is your approach suitable for such case:

Home currency is in AED

Customer currency is in USD

Bill currency is in EUR ?

Thanks for coming back, Hubprofi. Yes, the idea above applies when recording payment for a foreign bill with a different foreign currency in QuickBooks Online (QBO).

You can follow the steps provided by my colleague to record the payments in foreign currencies. Let's make sure we use the dummy bank account to make payment for the foreign bill. Then, transfer money from the foreign bank account to the dummy one. To learn more about this process, you can check out this article: Receiving and making payment for a foreign invoice/ bill with a foreign currency. This article is from Singapore, however, can be applied to all regions.

If you need your financial reports to show the current home currency value of your foreign balances, we can enter a home currency adjustment. Here's how:

1. Go to the Gear icon on the top menu and select Currencies.
2. Find the currency you want to adjust.
3. Under the Actions column, click the small arrow ▼ icon.
4. Tap Revalue Currency.
5. Choose a date (today or a day in the past) to run a currency revaluation.
6. Select whether you'd like the revaluation to be based on the market exchange rate or a rate you specify.
7. Choose the account(s) you want to apply the revaluation to.
8. Press Revalue and save. 

You can check out this article to create home currency adjustments: Enter home currency adjustments for your foreign balances. 

Moreover, refer to these articles for more information about multiple currencies: 

• About exchange rates
• Enter and use your exchange rates

The Community always has your back if you have additional questions about multicurrency or any QuickBooks-related concerns. Feel free to leave a comment below and we'll get back to you, Hubprofi.