Tag Archives: Desktop accounting software

How to show transaction currency instead of functional currency in QuickBooks Ageing Report?

Functional currency, also known as Base Currency or Home Currency, is a reporting currency used in businesses. Transaction currency in another hand is a currency used in the transaction such as Invoices, Payment or Receipts, which could be a foreign currency.

You have to convert the transaction amount to the functional currency based on the exchange rate if the transaction is a foreign currency. Software which supports multiple currencies will do the conversion automatically once the exchange rate has set.

QuickBooks accounts receivable

By default, QuickBooks ageing report prints in functional currency. For example, you have an outstanding receivable of US$10,000 at an exchange rate of 1USD:1.3SGD, the receivable report prints S$13,000 instead of US$10,000. You have to customise the report if you want the ageing report show in transaction currency (USD) instead of functional currency (SGD). Select The Transaction Currency’ radio button from the Display tab of the Customise Report wizard allow the ageing report to print in transaction currency instead. You can also do a currency filtering from the filter tab of the Customise Report wizard to limit the number of currency show in the ageing report.

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Changing GST rate in QuickBooks Desktop accounting system

You can change the GST rate of those affected GST code from 6% to 0% on the effective date that the Malaysia government scrapped off the GST. You should not amend the existing transactions once the rate has changed to prevent QuickBooks from recalculating the GST base on the new GST rate.

Change GST rate

It is better to complete the transactions with 6% rated GST before amending the GST rate since QuickBooks does not have a change over date set in the GST profile.

As a QuickBooks administrator, you should lock the account by setting up a closing date and password to prevent other users from editing the existing transactions. Do a backup before the rate change, just in case you need to roll back after rate changed; and an integrity check (Rebuild and Verify Data) before and after rate changed.

 

Note:
For users who are using an older version of QuickBooks (especially Reckon QuickBooks version) may consider adding a new GST code than replacing the current rate. There is a risk that the old rate may get replaced when migrating to the latest version.

 

Home Currency Adjustment on Reckon QuickBooks

Reckon introduced multiple currencies feature in QuickBooks* version 2003, which is much earlier than intuit QuickBooks US and QuickBooks Canadian version but slightly after Intuit QuickBooks UK.

Although all are ‘QuickBooks’, the multiple currencies feature are different. There is a Home Currency Adjustment wizard built-in in Intuit QuickBooks but not the Reckon version. You have to use a home currency adjustment journal to revalue the foreign currency accounts in Reckon Accounts (aka Reckon QuickBooks).

Assuming the home currency is Singapore dollar and you have a foreign receivable of US dollar 33 thousand at an exchange of 1USD:1.38SGD and the rate has changed to 1USD:1,35SGD at the end of January. The Singapore dollar receivable value has dropped from 45,540 to 44,550, which gives an exchange loss of Singapore dollar 990.

Instead of manually calculating the exchange gain/loss adjustment, you can print an Unrealised Exchange Gain/Loss report from the Reports menu (under the Multicurrency report section) to find out the unrealised gains and losses to adjust.

QuickBooks unrealised exchange report

Then based on the Unrealised Exchange Gain/Loss report, record a home currency adjustment journal into QuickBooks.

The Unrealised Exchange Gain/Loss report shows only the total Singapore dollar value of each foreign currency account instead of each foreign currency debtor or creditor. Therefore, you need to create a dummy receivable and payable for each foreign currency. For example, you create a dummy debtor, USD AR Adjustment, and use it to adjust the US dollar accounts receivable account.

From the Company menu, select Make General Journal, check the Home Currency Adjustment checkbox at the bottom of the journal and record the journal in Singapore dollar. On the first line of the journal, select foreign currency accounts receivable account, enter the loss of 990 under the credit column and select USD AR Adjustment in the name column. Next, debit 990 to the Exchange Gain/Loss Unrealised account and save the journal.

QuickBooks home currency adjustment journal

You need to reverse the Home Currency Adjustment journal on the following month to allow QuickBooks to calculate the exchange gain/loss between the invoice and payment when payment received. You can either manually pass a reverse journal or open up the home currency adjustment journal which you did earlier and click the Reverse button located at the top of the journal. From the monthly Profit & Loss report, a positive value indicating a loss in exchange unrealised in January; and a negative in February reversing the January adjustment.

QuickBooks Reverse Journal

QuickBooks Profit and Loss

The latest version of Reckon Accounts is 2018, contact Reckon or us if you like to upgrade your existing Reckon QuickBooks or Reckon Accounts.

 

*Reckon Accounts is formerly known as Reckon QuickBooks.