Multi-currency supplier bills in QuickBooks Online and Xero: use the bill-date rate
Record a foreign-currency supplier bill in the currency printed on the invoice, dated on the invoice date and converted at the exchange rate for that date. Let QuickBooks Online or Xero hold the foreign amount and work out the home-currency value, rather than converting by hand. When you pay, any difference from the bill-date rate becomes a realised gain or loss.
General information for bookkeepers, not accounting, tax or legal advice. Rules and software screens differ by country and change over time.
How exchange differences and foreign tax are treated depends on your jurisdiction and your accountant's policy. Plans and screens differ and change over time.
Entering a foreign-currency bill
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Read the currency on the invoice
Look for an ISO code such as EUR or GBP, not just a symbol. A bare $ could be US, Canadian, Australian or New Zealand dollars, so check the supplier's country and any tax wording.
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Switch on multicurrency and set the supplier's currency
Do this once, before the first bill, because some settings are hard to undo. In QuickBooks Online the currency belongs to the vendor.
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Enter the bill in the foreign currency
Use the amounts as printed, in the invoice's currency, with the invoice date as the bill date.
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Check the exchange rate
The software offers a rate for the date. If your policy is a bank rate or another documented rate, change it and note the source.
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Check the home-currency total
The foreign total times the rate gives the home-currency value. A wrong rate shows up here first.
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Record the payment against the bill
Use the actual rate or home-currency amount from your bank. The difference from the bill-date rate is the realised gain or loss.
How the two products compare
| Point | QuickBooks Online | Xero |
|---|---|---|
| Availability | Intuit's help lists Essentials, Plus and Advanced, not Simple Start. | Depends on your plan and region. Check Xero's plan details. |
| Switching it on | Cannot be switched off, and the home currency cannot change afterwards, per Intuit's help. | Add the currency in your organisation's settings first. |
| Supplier's currency | Set when the vendor is created. To change it, make the vendor inactive and create a new one. | A contact can usually carry a default currency, and the bill shows its own. |
| Rate on the bill | Rates update automatically, every 4 hours per Intuit's help, and you can enter your own. | Offered by Xero for the date. Check whether you can edit it in your version. |
| When you pay | The difference from the bill-date rate is recorded as a realised gain or loss. | Settling the bill records the realised gain or loss. |
| Import file | The BillToCSV file ends with a Currency column. It matters only when multicurrency is on. | The bills template has an optional Currency column that takes a code such as EUR. |
A worked example
A supplier bills EUR 1,000.00 on 3 March. Your home currency is USD. The rates below are illustrative, not market data.
- Bill date. At 1.0800 the bill is worth USD 1,080.00. That is the expense and the payable.
- Payment, rate rises to 1.0950. You send USD 1,095.00. The extra 15.00 is a realised loss.
- Payment, rate falls to 1.0650. You send USD 1,065.00. The 15.00 saved is a realised gain.
Either way the supplier is owed EUR 1,000.00 and its statement still agrees, because the bill kept its foreign amount. A bill converted by hand to USD 1,080.00 would lose that link.
At period end, open foreign bills are normally restated to the period-end rate for reporting, and each product does this in its own way. Ask your accountant how it should appear in your books.
What goes wrong
Today's rate instead of the bill date
A bill keyed a week late at today's rate misstates the expense and the payable. Use the invoice-date rate or your documented policy.
A hand-converted bill
Entering the home-currency equivalent drops the foreign amount, so the supplier's statement never reconciles and no exchange difference is calculated.
A bare $ taken as US dollars
Canadian, Australian and New Zealand suppliers use the same sign. Look for GST, HST or an ABN, and check the supplier's country.
A supplier set up in the wrong currency
In QuickBooks Online the vendor's currency is set at creation, and changing it means a new vendor. Confirm the currency before the first bill.
Foreign tax lines left unchecked
Whether tax on a foreign invoice is recoverable, and at what rate it converts, depends on your jurisdiction. See sales tax and VAT on supplier invoices.
How BillToCSV helps
BillToCSV reads the currency from an ISO code or symbol on the bill and writes it to the Currency column of the QuickBooks, Xero and review files. A bare $ is read as USD, and a bill that mentions GST, HST, PST, QST or an ABN gets a warning to check it. It does not look up exchange rates or convert amounts, so every figure stays as printed in the bill's own currency, and the conversion happens in your accounting software. Free: 1 file per day, up to 10 pages, no account. Files over 10 pages are converted up to page 10 on the free allowance; a page code converts the whole file, up to 150 pages. See pricing.
Questions people ask
Which exchange rate should I use for a foreign supplier bill?
The usual convention is the rate on the invoice date. Some firms use a documented average or bank rate instead. Be consistent, note the source, and ask your accountant what your jurisdiction expects.
Do I need multicurrency switched on to enter a foreign bill?
To keep the foreign amount and let the software calculate exchange differences, yes. Without it you convert by hand and lose the foreign balance. It is not on every plan, so check yours first.
Can I turn multicurrency off in QuickBooks Online?
Per Intuit's help, no. Once it is on it cannot be turned off, and the home currency cannot be changed afterwards. Decide before you switch it on.
What is a realised exchange gain or loss on a bill?
The difference between the home-currency value recorded at the bill date and the value when you pay. In the example above, EUR 1,000.00 recorded at USD 1,080.00 and paid at USD 1,095.00 is a realised loss of 15.00.
What if a supplier starts billing in a different currency?
Treat it as a new currency for that supplier. In QuickBooks Online a vendor has one currency, so a second currency usually means a second vendor record. Ask your accountant how to organise them.
Does BillToCSV convert currencies?
No. It keeps every amount in the currency printed on the bill and writes the ISO code to the Currency column. Conversion at the bill-date rate happens in QuickBooks Online or Xero.