Have you expanded your business into new countries and localities? QuickBooks can help by tracking and managing multiple currencies. There are both advantages and disadvantages to turning on the multicurrency feature. Remember, multicurrency cannot be turned off, so back up the company file before turning it on in case you change your mind.
Advantages of turning on multicurrency:
- QuickBooks maintains the foreign debits and credits as well as their value in the home currency for every foreign transaction.
- You can reconcile foreign accounts like banks and credit cards in their native currency, without having to consider the exchange rate.
- You can invoice customers in their native currency.
- You can issue purchase orders to vendors in their native currency.
- You can have QuickBooks calculate automatically the gains or losses on foreign exchange as well as track the exchange rate on foreign currency transactions.
Disadvantages to turning on multicurrency:
- You can only download current exchange rates. If you haven’t been downloading for some time, you have to enter the historical exchange rates manually.
- Although you can set up static foreign prices using the per item price levels, you cannot do the same to create static foreign unit costs.
- Some features are not available when you turn on multicurrency (i.e. online payment of invoices cannot be enabled for multiple currencies).
- You cannot set up automatic memorized transactions in foreign currency.
The above are just of a few advantages and disadvantaged of using the multicurrency feature in QuickBooks.
To learn more about multicurrency features please contact your LSL Advisor at 714.569.1000.
Written by: Laurel Morrison
