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!