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amli2019
April 28, 2023
Question

How do I correct exchange gain/loss recorded automatically by QBO?

  • April 28, 2023
  • 1 reply
  • 0 views

Hi,

My home currency is EUR and I have 1 bank account which only allows payments made in EUR (note that this bank account is not connected to QB so I make all transactions manually).

I received a supplier bill in SEK. As I cannot pay this supplier in SEK due to my bank's account restrictions, I have paid this supplier in EUR. 

As suggested in one of the articles on QB Help Centre, I have created a dummy SEK account in QB which I used to 'pay' the bill with in QB. However, as the exchange rate changed between the date of receiving the bill and the date of paying the bill, an exchange gain or loss is incurred.

In my case, the SEK weakened, which means that the EUR amount that was recognised upon receipt of the bill was higher than the one upon payment and therefore an exchange loss should be recorded. 

 

My problem is this: 

When using the regular module 'Make payment' with the dummy bank account, QB automatically converts the SEK amount on the date of payment and the amount that hits the dummy account excludes the exchange loss. This is automatically recorded as an exchange gain, because when comparing the dummy to the AP ledger, it looks as if we have paid less.

 

Is there a workaround for this issue?

 

The help article didn't mention anything about potential exchange gains or losses, but someone else must have experienced something similar?

Thanks in advance!

1 reply

Rubielyn_J
Rubielyn_J
April 28, 2023

Hello there, Amli.

 

Correcting exchange gain/loss in QuickBooks can be tricky, but I'm here to help with some insights.

 

In the event of discrepancies with the amount reflecting an exchange gain, a Journal entry can be created to rectify the issue. To ensure the appropriate accounts are used, it is helpful to seek the advice of an accountant.

 

Here's how: 

 

  1. Click + New and select Journal entry.
  2. On the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
  3. On the next line, choose the other account you're moving money to or from. 
  4. Check the Amounts. You should have the same amount in the Credit column on one line and the Debit column on the other. 
  5. Enter information in the Memo section.
  6. Click Save and New or Save and Close.

 

To further aid you in managing exchange rates in QBO, I'll be sharing the following articles:

 

 

Should you require further assistance with managing exchange gain/loss recorded in QuickBooks, please keep me informed. I'm always happy to help.

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