Dataswitcher converts some systems in home-currency (for example Xero). The reason behind this type of conversion is that the source system does not support converting all data from multi currency in the correct way. For example, Xero allows a customer or supplier to have invoices or bills in different currencies. Quickbooks Online only allows invoices in the same currency as the customer or supplier. In the case of Xero, there is no way for Dataswitcher to correctly retrieve the correct balances on the foreign accounts (because the foreign currency changes every hour in Xero).
So in such a case, Dataswitcher converts all amounts in home-currency. After the conversion you have to follow these post-conversion steps to correctly reflect the amounts. The conversion in home-currency will always be correct, but since there is no foreign currency in the destination system, there will be no unrealized currency gains and losses in the destination system (so your profit and loss will be off by exactly that amount between the two systems).
Example for a JPY account
We take an example and guide you through the process. In our Xero account we have a JPY account:
Post conversion this account looks like this in Quickbooks Online:
We can also see this bank account is off by 42 cents, this because the currency has fluctuated since the conversion.
We can also double check this in Xero under Reports > Foreign Currency Gains and Losses, you can see you have an unrealized gain there (that is at least half a cop of coffee!):
It's important to realize, that this specific 0.42 cent gain, will not be converted to Quickbooks Online. This because this is not realized yet in Xero and there is no journal to reflect this result (it is calculated in realtime by Xero).
Transfer the home currency funds to a new account in Quickbooks
Before starting with this, enable multi-currency in Quickbooks so you can select different currencies per accounts (Company Settings > Advanced). Then create a new account in the JPY currency (you can't change the existing account):
Now let's transfer the amount on the existing account to the new JPY account via a Transfer (click the plus and "Transfer"). First we need to calculate the exchange rate at conversion date. We can do this by dividing the foreign currency of the account at conversion time by the amount we have in Quickbooks:
Currency rate at conversion date = 10000/1192670=0.00838454895
However this currency rate has more decimal places than Quickbooks Online accepts so there will be a rounding difference. So we round this down to the amount Quickbooks supports: 0.008385. Based on this we will transfer the right amount so the old account is actually cleared. In our case:
So we have (1/calculated currency rate)*amount in home currency. Let's create the transfer:
We now however, have a difference in our JPY account in foreign currency:
The ending balance should really be 1192670 JPY. However because of limitations in Quickbooks (conversion rate precision) we need to revalue the account to this amount. We need to do this with a journal entry:
With this journal entry we can align the amounts in foreign currency. We use the Rounding (DS) account but we might also use realized currency gains. The foreign amount now lines up:
From this moment on, Quickbooks can track your foreign currency accounts like built in accounts. This means this change is only needed for all foreign accounts post-conversion. Unrealized, realized gains and losses will all be tracked by Quickbooks after you did this step.
Also after the conversion you might want to change your foreign customers and suppliers to their correct currencies (you have to create new customers and suppliers for them). And maybe transfer all open invoices to new invoices with the right currency so the foreign currency gains and losses can be tracked on them.