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K
klous-1
August 22, 2023
Question

Foreign Currency Stock Import to QBO

  • August 22, 2023
  • 2 replies
  • 0 views

When importing stock to QBO from QBD we have noticed an issue with the items we buy in foreign currency.

 

Our home currency is GBP and generally speaking our foreign currency is EUR.

 

We were instructed a long time ago by Intuit to set the purchase cost of these EUR bought items as ZERO in QBD.  This way, the QB system monitors the bills for the respective items and calculates a value for them based on the realised cost in GBP (this is because a 100 EUR part might cost £80 or £90 for example depending on the exchange rate at the time).

 

QBO works in the same way.

 

However, now that we have imported the stock with a spreadsheet using the import tool (as MMB doesn't do stock) there is no bill history for QB to draw on (as MMB doesn't import transactions as bills with actual items, just text and cost centres).  This leads to several issues;

1. The stock valuation is wrong (for any EUR bought items basically the stock value is zero).

2. Any item sold from stock does not have any associated cost of goods sold, because QB thinks they cost zero, and no there is no reduction in the value of the stock (because QB thinks it cost zero).

3. This means the profit is 100%....and, as much as we love paying tax, we'd rather not pay it on 100%.

 

I asked the support team, but they couldn't help (they made some pretty poor suggestions).

Has anyone managed to fix this?

2 replies

M
Mich_S
August 22, 2023

I can see you're trying to fix discrepancies in your stock data, @klous-1. Let me provide information on how migrating from QuickBooks Desktop to QuickBooks Online affects them. I could also guide you through the step-by-step process to resolve this.

 

When using the Movemybooks app, the conversion will be subject to their terms of service that you'll be required to accept in order to obtain the services. The incorrect stock information is likely due to migration limitations when using the tool. Although you can transfer your stock to QBO, this will need to be done manually. QuickBooks Pro/Premier uses average cost to calculate your stock costs, while QuickBooks Online uses first-in-first-out (FIFO).


Before moving your data, you'll need first to select a First-In-First-Out (FIFO) stock start date. Once this date is set, it can no longer be modified, and any transactions prior to this date can't be edited. Transactions occurring on or after the chosen date will be displayed using the FIFO method. I suggest choosing the first day following your company's most recent tax filing period. This will prevent the need for filing amended forms.

 

Here are some examples of FIFO stock computations:

 

For instance, your stock item has a cost that changes over time. Instead of selling this item directly, you use it to create your final sellable product. Check this screenshot for more details:

 

 

For this particular illustration, we will use 200 units of this stock to create the final product that your customer has already purchased. We'll examine the average costing method (in QuickBooks Desktop) and the FIFO method (in QuickBooks Online) for this specific stock item.

 

 

Explore this QuickBooks blog article for more information about this: Average Cost vs FIFO.

 

Complete this form and send it in by the due date for the timely filing of your business tax return. For the current tax year, it must be filed by October 15 (the due date of your return with an automatic 6-month extension). I recommend contacting your tax advisor or accountant for more information about completing this form:

 

 

You can also browse the View All help module to learn more about getting started with QBO.

 

Keep us updated if you have other questions regarding this. I'm here to assist you further. Keep safe!

K
klous-1Author
August 23, 2023

Hello Mich,

 

Thanks for the reply.

 

The issue is that the system has no historical transactions to create the FIFO value for existing stock.

 

This means the stock value is incorrect, stock doesn't reduce in value when a product is sold, and profit on sales is 100%.

Fiat Lux - ASIA
Fiat Lux - ASIA
August 23, 2023

@klous-1 

You may consider buying another 3rd party service to convert data with multi currency transactions. You can only need to convert data for current fiscal year and 1 historical year to lower your cost. Then you can open your QB Desktop file locally to find any historical data if required. 

K
klous-1Author
August 23, 2023

Thanks Fiat 🙂  Thought I might see you here!

 

Since the migration, and some problems we ran into, we discovered SaasAnt tools which have been extremely useful and recommended.  

 

I've been considering importing all the multi-currency items for other reasons (MMB skipped completely 7 years of bills).  However, that looked like a very complicated task to fix due to many other linked transactions and I wasn't sure what sort of mess I would create, so I was a bit reluctant!

 

One issue could be that all the stock was set up on the migration date so I don't think that we can enter item transactions before that date.  If I import the bills of the stock, correctly with item numbers, then I'd also have to create the sales of those items (which have been imported as just text)....or maybe I can just amend the stock levels...I don't know...

 

Anyway, I'll look into it some more!

K
klous-1Author
August 23, 2023

Importing the old bills is not a possible solution, this would lead to high levels of stock, that could not be written off as the cost is already accounted for in the MMB (item-less) transactions.

 

However, we do see that QB has an initial stock level and, critically, "stock starting value", so this looks like it could actually be the answer....doesn't look like it can be imported though, so would need to be done manually.  Will investigate and test this out

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