On Monday, September 28th Intuit started shipping QuickBooks 2010 and Enterprise Solutions 10.0. When you’re ready to upgrade, get the latest discounts on our Buy QuickBooks page.
Wikipedia, there are a number of forces in the computing world that are driving the “rapid acceptance” of SaaS applications, including the expensive overhead of purchasing and running applications locally, the economics of centralizing the cost of sophisticated technologies, and the availability of trusted and transparent security.
Small business accounting is full of the challenges that make SaaS a perfect fit. In the QuickBooks world, a small business needs to plan for software upgrades every 3 years at a minimum, and probably much more frequently. Beyond the cost of the software upgrades themselves, there’s typically additional cost to install and configure them properly. Next comes the ongoing cost of getting fast and reliable accounting software support. For many small businesses, simply finding qualified people to perform these tasks can be a challenge. With QuickBooks Online Edition, a small business is outsourcing all of the regular upgrade and support costs to Intuit, a company with the scale and technical resources to handle them. And it’s doing so by trading bigger up-front purchase costs for much lower monthly costs. As Wikipedia notes:
Computing and application licenses are cost centers, and as such, they’re suitable for cost reduction and outsourcing.
QuickBooks Online Edition offers 3 powerful advantages:
- lower up-front software costs resulting from less expensive, on-demand pricing
- reduced burden for installation, maintenance, and support
- rapidly scalable access to your accounting data when and where you need it
Online Edition virtually eliminates the need to upgrade accounting software on a regular basis. Intuit itself takes care of that hassle. A subscription to Online Edition also solves the problem of getting fast support to accounting software issues. Support is included in all versions of Online Edition, and the more advanced version provides call back support with an expected response time of 30 minutes. 1 By comparison, Intuit charges $299 per year for a support plan for the desktop QuickBooks Pro. Note that for QBGarage.com customers with Pro, Premier, or Enterprise solutions, email support is free. We also have our own dedicated QuickBooks KnowledgeBase which includes answers to questions on how to use QuickBooks in specific situations.
However, Online Edition isn’t suitable for every business. While Online Edition is a robust program, it lacks many of the features of the advanced desktop versions of QuickBooks. For example, QuickBooks Premier and Enterprise Solutions support multiple ship to addresses per customer; Online Edition doesn’t. A SaaS application like Online Edition that sets high standards for data reliability and integrity will typically not perform as fast as a comparable desktop version running on reasonably current hardware. That performance penalty is not a factor for most tasks, but companies facing a need to enter large volumes of transactions will observe that Online Edition is slower than its desktop counterpart.
Online Edition is available in 2 versions, Basic and Plus. Basic is designed as an introductory program for businesses automating their accounting for the first time. Therefore, there are no tools to import data to Online Edition Basic. Basic supports 1 user and the company’s accountant – for a total of 2 users. Because Basic is targeting users with simpler accounting needs, it doesn’t include some of the more powerful features of Plus. Among the omitted features are: estimates, invoice customization, employee time-tracking by customer, online banking, and class tracking. There’s also no 30 day free trial available.
Plus supports up to 3 users and the company’s accountant, but there are additional cost options to bump the maximum number of users from 3 to 10 or 25. For both Basic and Plus, an unlimited number of users can be given access to view reports. Plus incorporates those features not included with Basic. To get a better understanding of the feature differences between Basic and Plus, have a look at Intuit’s more complete comparison.
For 2009, Online Edition got a few improvements, namely improved support for online banking in the Plus version, direct deposit for online payroll, accountant data interchange for online edition payroll, and iPhone support.
There are a few considerations to insure that Online Edition is the right accounting product for your business. First, Online Edition does not include the full feature set of Intuit’s desktop products, such as Pro or Premier. Intuit has a guide that compares Online Edition Plus to Pro as well as a QuickBooks Family Guide. We’ve also prepared our own QBGarage.com QuickBooks Product Comparison 2009 that includes all of the QuickBooks general ledger products, including both versions of Online Edition. Check it out to see how the different programs compare.
Second, an Online Edition subscription is for a single company with 1 tax identification number, while the desktop products can be used to manage the accounting needs of multiple businesses. And Online Edition only works with Microsoft’s Internet Explorer browser.2 Users of other popular browsers, such as Firefox or Safari, are out of luck.
how specific data elements are converted. In general, current data sources include QuickBooks versions from 1999 through 2008, and you can only convert as you are creating a new company. The size of your QuickBooks company is also an important consideration. If your company file is under 70 Mb in size, your conversion will almost always proceed without a hitch. For company files in the range of 70 Mb to 120 Mb, conversion will probably be successful, but there’s an increased chance that it may not. For a company file over 120 Mb in size, the risk of an unsuccessful conversion increases significantly. Since there is a trial period with Online Plus, there’s no risk if the conversion isn’t successful. We’ve identified professionals at Intuit who can assist to make sure the set up process for Online Edition is fast and easy.
To find the size of your current QuickBooks company file, press F2 while you’re running QuickBooks to display the Product Information screen. You’ll see a screen similar to the one displayed nearby that shows a company file of 14924K, or about 14.6 Mb. (As with most of the images on our site, click on the image for a better view.) In other words, this company file is well below 70 Mb, so we’re good to go!
There are a number of differences in the way information is presented onscreen in Online Edition compared to the desktop versions of QuickBooks. We’ve prepared a side-by-side comparison of QuickBooks Premier 2009 and Online Edition Plus for several common business tasks to highlight what a user of each program will see. In all of the comparison panels that follow, QuickBooks Premier 2009 is on the left and Online Edition Plus is on the right.
Here’s our comparison panel to add a new customer:
In addition to the Address Info screen, the QuickBooks desktop version has 3 additional input screens: Additional Info, Payment Info, and Job Info. Information on these screens isn’t stored by Online Edition.
Here’s our comparison panel to add a new AP vendor:
Here’s our comparison panel to create a customer invoice:
And lastly, here’s our comparison panel to enter a vendor AP bill:
The Online Edition screens are simpler than their desktop counterparts and also include helpful links to related tasks. However, some of that simplicity is achieved by excluding information, such as data fields that are otherwise available in the desktop editions of QuickBooks. Because the desktop editions of QuickBooks are designed for a very broad range of businesses, you may find that the excluded information isn’t vital to your business or can be maintained with other software tools.
To help you learn more about QuickBooks Online Edition, Intuit offers several online videos. There’s an interactive tour and a presentation on the optional Time Tracker feature. The interactive tour is on the left; the Time Tracker presentation is on the right. Just click the image to play the respective video.3
Intuit also offers an Online Edition Learning Center where you’ll find a number of useful guides, from Tips & Tricks to a Year End planning guide.
In the final analysis, Online Edition’s biggest strengths are its cost savings, providing “anytime, anywhere” access to accounting information in a rapidly scalable model, availability of support, and elimination of ongoing software maintenance. For many businesses, it’s a worthwhile trade-off to give up some speed or detail information to obtain those benefits. If that describes your business, Online Edition is the right choice. To get started with either a live installation of Online Edition or your free trial, just let us know. We’ll get you up and running very quickly.
- For Online Edition Basic, email support is available with an expected response within 24 hours. For Online Edition Plus, chat and email support are available, in addition to call back support with an expected response within 30 minutes. [↩]
- It requires IE 6 or newer with active scripting enabled. [↩]
- Note that as of this writing, the videos appear to contain a Flash version check which will fail to recognize that you have Flash installed if you are running the latest version of Flash, which is 10. See our Site Help page for more info on checking your Flash version. [↩]
UPDATE: Time never stands still, and that aphorism certainly applies in the payroll service world. This article has become one of our most popular, so with all of the changes in payroll services for QuickBooks customers, it was overdue for a refresh. At long last, here it is.
Best Choice for Payroll Processing for 1 Company:
Best Choice for Payroll Processing for Up To 3 Companies
In response to a request, we undertook a comparison of 3 big payroll services: Intuit, ADP, and Paychex. We did our initial comparison in late 2008, and we freshened that analysis at the start of 2011.
Since our initial analysis, there were some big changes in the payroll processing world. In 2009, Intuit acquired PayCycle for about $170 million. PayCycle was one of the largest players in the online payroll processing market, and the acquisition added significantly to its share of this market. The big impact: Intuit’s focus on online payroll products has increased.
Since we conducted our initial analysis more than 2 years ago, the cost of Intuit’s online payroll offerings has either dropped by 24% or gone up by 4%, depending on the product you choose, and there are more online products from which to choose. In the same time period, the effective cost of its desktop payroll products has jumped by 32%. It’s easy to see that Intuit is encouraging users to process payroll online by making the online service offerings more capable and widening the price gap to similar desktop products.
Let’s see how the 3 payroll service providers stack up in 2011.
First, the basics. Our objective was to find the right software or service to prepare payroll and file/pay all payroll taxes for a firm with a payroll of 10 employees paid weekly in a specific northern Virginia zip code. Payroll costs should easily integrate with the QuickBooks GL. Once implemented, the firm will be switching from the current manual payroll system.
We started with online quote systems and supplemented what we learned with phone calls and emails to pin down the details.
In payroll processing, as you’ll soon see, the devil is in the details. We compared:
- Intuit Online Payroll
- QuickBooks Basic Payroll
- QuickBooks Enhanced Payroll
- QuickBooks Assisted Payroll
If you need to distribute physical checks to employees, there are some fundamental differences between Intuit’s service offerings and the competitors we evaluated. For all of the Intuit services, an organization must print any physical checks it needs to distribute. For all but 1 service plan (Assisted Payroll) it also needs to print any forms that will be distributed to employees, such as W2’s. For ADP & Paychex, delivery of physical checks and forms is either included or available as an extra-cost service. Printing checks and forms is a routine task that QuickBooks users perform regularly. Therefore, if the savings are significant, the small amount of extra work to print any required payroll checks isn’t a big hurdle to adopt Intuit’s services.
Intuit Online Payroll comes in 2 flavors: Basic and Plus with monthly costs of $25 and $39 respectively.1 Quoted monthly costs don’t tell the whole story. The standard monthly fee includes service for 1 employee, and every additional employee costs $1.50 per month. For a 10 employee company, that takes the monthly costs up to $38.50 for Basic and $52.50 for Enhanced. Offsetting that jump in monthly cost is the fact that Intuit Online Payroll does not charge extra for direct deposit fees. Another consideration is that Online Basic doesn’t support paying 1099 contractors, but Online Plus does.2 Online Basic doesn’t complete state tax forms – an important task in payroll processing. One other wrinkle: Intuit Online Payroll Plus provides state tax processing for 1 state at its standard monthly rate; every additional state is an extra $12 per month. Although we include it in our comparison table, we can’t consider Online Basic as a viable contender in our comparison.
QuickBooks Basic Payroll is targeted at firms that need to process payroll and want up-to-date tax tables for payroll calculations but will prepare, file, and pay payroll taxes either on their own or with the assistance of their outside accountant. Despite the “Basic” in its name, this is a desktop product and is separate from Online Basic. QuickBooks Basic Payroll is a good value for firms with up to 3 employees, and for an extra cost it can handle an unlimited number of employees. Payroll can be completed by printing a check or making a direct-deposit, but direct deposits carry an extra fee of $1.25 per deposit. When combined with your payroll frequency, this direct deposit fee has a big impact on the smart choice for payroll processing. If you pay frequently, it tips the scales to a service like Online Payroll Plus that doesn’t carry a direct deposit fee. Like Online Basic’s lack of state payroll tax processing, QuickBooks Basic Payroll doesn’t meet one of our requirements – filing and paying payroll taxes. Therefore, the desktop Basic Payroll is just included for completeness.
QuickBooks Assisted Payroll extends the service of Enhanced Payroll3 to include Intuit preparing, filing, and paying payroll taxes. It also has an extra cost option to supply complete W2 forms at year-end. Of course, strong integration with the QuickBooks GL is standard.
One of the important differentiators for Intuit payroll service offerings is the number of different employer identification numbers supported. An employer identification number (EIN), or tax identification number, is a unique number issued to a business. If you need to process payroll for several businesses, don’t overlook the number of EIN’s supported, because this detail can completely change the outcome of this comparison. QuickBooks Assisted Payroll and Intuit Online Payroll, including Basic and Plus, are designed to process payroll for a single EIN. If you have 3 companies that need payroll processing, plan on buying 3 subscriptions. QuickBooks desktop-based Basic and Enhanced handle up to 3 EIN’s.
Intuit PayCard, and any direct deposit payroll payment can make use of this capability.
For small businesses, ADP has 3 packages: Compliance, Compliance with Pay Convenience, and Compliance with Pay Convenience and Reporting. Note: The links open images of the actual ADP quotes. Compliance is similar to QuickBooks Basic Payroll except that ADP will supply printed paychecks or make direct deposits; payroll taxes are calculated, but not filed or paid. Compliance with Pay Convenience and Reporting is the most expensive of the 3, and the extra cost is for additional reporting which could be useful in certain environments (e.g., a unionized workplace). ADP’s standard reporting covers most needs. Therefore, we’ll focus on ADP’s Compliance with Pay Convenience, which includes making payroll by paycheck or direct deposit4 and paying/filing all payroll taxes. It also includes a QuickBooks GL interface at no cost if a company’s accountant is a contact for the service.
For Paychex, we evaluated two options: its Flexible pay package and Small Biz paperless option. Flexible was the option quoted on the web, but the quote omitted the cost of a number of services to meet our requirements. Small Biz is a new paperless option quoted by the local Paychex rep that offers a cost significantly lower than other Paychex programs, but it lacks a true QuickBooks GL interface and is only a good choice if all employee payments are made by direct deposit.
In fairness to both ADP and Paychex, we didn’t spend a lot of time updating their pricing, but their approach to marketing their services is to blame. For all of the Intuit offerings, any visitor to the company’s website can see a plainly visible price. To be sure, that price needs to be adjusted for details often buried in footnotes. In contrast, a visitor to the sites of ADP and Paychex won’t find pricing in plain sight. Pricing is only available with a phone call or a contact form submission. Business owners quickly learn a rule of web marketing: if a company doesn’t openly publish prices, its prices aren’t the lowest. Intuit deserves a lot of credit for its relative price openness. There’s still room for improvement, but Intuit is well ahead of ADP and Paychex when it comes to pricing transparency.
Now for our comparisons. First, a word about gathering the data. Our first stop was the website for each service, and in our first pass we followed up with phone calls and emails to company reps. As noted above, for our latest update, we checked in with Intuit but didn’t have time to pursue updated quotes from ADP and Paychex.
Every service had some extra charges that required digging to unearth. But the significance of these extra charges varied widely. While ADP was the most expensive, in our initial comparison it got high marks for responsiveness and directness. Within a day of requesting our quote, we had a follow-up email from an ADP manager. That in turn prompted more questions from us, and in just a few hours, those questions were fully and directly answered.
If ADP was responsive and direct, Paychex was a little harder to work with in our first go-round. Its national sales center wouldn’t give out pricing information, leaving that to a local rep. The local rep provided fast, thorough answers and came up with a recommendation for a different service offering that was 63% below the program quoted online. But if a business is going to have an online quote system and a national sales center, why not let those systems quickly present the company’s best price? More importantly, the cost for the service quoted online was $2028, but the bottom line cost for what we were trying to price was $3889.50, or 92% higher. That’s a lot of extra-cost add-ons that should have been easy to include in the online quote.
Intuit’s payroll team was quickly reachable by phone and provided some of the extra charges that aren’t included or easily located on its website. For Enhanced Payroll, all costs are shown on Intuit’s website. However, Intuit’s Assisted Payroll had 1 add-on cost (i. e., the cost for W2’s) that required a phone call to identify. That item bumped the price by about 5%, far less than the 92% jump for Paychex. Assisted Payroll recently experienced a major price increase that wasn’t included on Intuit’s website as of the date it went into effect, but it did make it online by the time we finished this post. For the Intuit offerings, we applied our ProAdvisor/Affiliate discounts, which you can take advantage of by following the links at the top of this page or on our Buy QuickBooks page. For Enhanced Payroll, the savings is about $112.
So where does that leave us? If yours is a single business processing weekly payroll in 1 state that uses direct deposit for all of its employees, Intuit Online Payroll Plus is your best bet. Take note of our emphasis on weekly payroll, because your payroll frequency has a big impact on your choice. If you only process payroll monthly, the desktop-based QuickBooks Enhanced Payroll is cheaper. With 12 pay periods triggering fewer direct deposit fees, Enhanced Payroll costs about $411.80 compared to $630 for Online Payroll Plus.
If you need to process payroll for more than 1 employer identification number, QuickBooks Enhanced Payroll is the clear winner. At 52 pay periods per year, our chart shows QuickBooks Enhanced Payroll costs $911.80. For 2 or 3 companies, that cost doesn’t change. For QuickBooks Online Payroll Plus, it jumps to $1260 for 2 companies and $1890 for 3. That’s a jump of 38% and 107% respectively.
Outside of the Intuit offerings, the Small Biz paperless option from Paychex was the next cheapest solution – but it’s 136% more expensive than QuickBooks Online Payroll. That extra cost comes with a few compromises: there’s no straightforward QuickBooks GL integration and manual checks would have to be produced for every employee not using direct deposit. If we consider the Paychex Flexible and ADP Compliance with Pay Convenience packages, the cost difference is even greater. Paychex Flexible is 543% more than QuickBooks Online Payroll, and ADP’s package is 477% more expensive. The Paychex cost ignores the cost of getting printed checks, which needs to be added to produce a fair comparison to ADP. That puts Paychex 612% more than the QuickBooks Online Payroll Price. Opting for QuickBooks Online Payroll results in savings of over $2676 compared to ADP and over $3418 compared to Paychex. Those savings are hard to ignore.
Intuit’s Assisted Payroll is priced much lower than either Paychex or ADP if a firm needs physical pay checks (which would rule out the Paychex paperless offering), but it’s more than 3 times the price of QuickBooks Online Payroll Plus. That extra cost gets Intuit to file and pay payroll taxes, along with supplying W2’s. Since Online Payroll Plus includes the no-cost E-File and E-Pay options and the ability to print W2’s, that’s a price difference of almost $1000 for a 10 employee firm for what amounts to a few mouse clicks each pay period.6 Of course, having an outside payroll processor that files and pays taxes imposes a certain discipline on a company, and some firms may find it worth that extra cost for that reason alone.
For companies using QuickBooks, Online Payroll Plus and QuickBooks Enhanced Payroll offer compelling savings. Current Paychex and ADP customers getting at least some printed checks and paying rates equivalent to our quotes could cut costs by 90% and 80%, respectively. A 10 employee firm setting up weekly payroll for the first time would face total costs7 of $12 to $18 per week. Those are numbers that are hard to beat.
- There’s a third option, Household, at $20 per month, but we’ll skip it for terms of this comparison. [↩]
- Intuit doesn’t make it clear that Online Plus supports 1099 contractors, but the virtually identical Plus product from Intuit subsidiary PayCycle does, as this PayCycle product comparison table sets forth. [↩]
- The monthly charge for Assisted Payroll covers up to 15 employees. Beyond 15, add $1 per employee per pay period. Assisted Payroll isn’t available in IN and WY. [↩]
- ADP also offers a debit card option, which can be an attractive option for lower-paid workers that use banking services less frequently. Offering the option can be a way to increase overall acceptance of electronic payment of payroll. [↩]
- For a copy of our original data, check out our 2008 Payroll Comparison. [↩]
- Because of the pricing structure for Assisted Payroll, the price difference grows rapidly for firms with more than 15 employees that pay on a frequency such as a weekly. For example, every employee paid weekly causes the price difference between Assisted and Online Payroll to grow by $104 per year. [↩]
- This cost doesn’t include costs for payroll check and form printing, if they’re required. [↩]
The real solution to accounting problems goes beyond just working through that paperwork stack, because it’s only a matter of time before a new stack of papers replaces the old one. Instead, the solution is to cost-effectively add skills to your team by outsourcing some or all of your bookkeeping functions. That allows you to immediately re-focus on using accounting information to control and manage the direction of your business.
Owners and managers that can immediately benefit from outsourcing often find themselves:
- spending so much time on data entry that there’s too little time left to manage and improve their business
- ignoring financial reports because they know what’s being reported isn’t accurate
- incurring interest and late fees because transactions aren’t being processed in a timely manner
- having to frequently recruit and train new accounting staff to the point that record keeping suffers
We offer both on-site and remote bookkeeping at both hourly and fixed-rate prices. Our bookkeeping services cover everything from basic transaction entry and reconciliations to payroll setup and processing.
Contact us today to take advantage of our free consultation. We’ll help you select the right set of bookkeeping services for your business. You’ll save money. You’ll have more time to manage your business. And the paperwork stack will disappear.
First, QuickBooks multi-currency support is off by default. It’s a company preference on the Edit->Preferences->Multiple Currencies menu. Once support for this feature is turned on for a particular company file, it can’t be turned off. When you track multiple currencies, you need to specify the home currency, which for US-based businesses is the US dollar. At the end of our review, we’ll see that one impact of tracking multiple currency transactions is that QuickBooks will automatically create an Other Expense account named Exchange Gain or Loss to record unrealized foreign exchange-related gains and losses.
To get oriented, access to multi-currency features are on the Company->Manage Currency menu.
QuickBooks 2009 offers the ability to download the latest exchange rates. As you can see from the Currency List captured after completing the download, exchange rates for only 12 of the most actively traded currencies were available. If you’re using a currency for which exchange rates aren’t readily available, you’ll have to enter that rate manually.
There’s also a Currency Calculator that can calculate the home amount, foreign amount, or exchange rate. The home amount (e. g. US dollars) is the product of the exchange rate and the amount of the foreign currency. The foreign amount is the result of dividing the home amount by the exchange rate. The exchange rate is the result of dividing the foreign amount by the home amount.
Home Currency Adjustment is used at the end of an accounting period to adjust your balance sheet accounts to reflect exchange rates on the balance sheet date. Balance sheet accounts are adjusted up or down by the amount of the unrealized gain or loss and posting the offsetting debit or credit to an Other Expense account. By default, the Other Expense account is named Exchange Gain or Loss. Until a home currency adjustment is recorded, balance sheet accounts represent the value in the home currency at the exchange rates used at the time each transaction was recorded. If the exchange rate has increased, your home currency buys more of the foreign currency, so the home currency adjustment will result in an unrealized gain. Home currency adjustments are calculated based on unrealized gains and losses. For example, for a customer invoice, gains or losses are unrealized until payment is received; after that, they’re realized and a currency adjustment is no longer applicable. QuickBooks 2009 provides reports for both unrealized and realized gains/losses, so we’ll see this in greater detail when we review these reports and the impact of entering a transaction that originated in a foreign currency.
Rounding out the Multiple Currency menu are 2 help tools. There’s a link to a multicurrency overview in the QuickBooks help file. There’s also a link to the Multicurrency Resource Center. Unfortunately, at this writing, this link just opens the QuickBooks integrated web browser and navigates to a general link that doesn’t contain information on using multiple currencies. Since foreign exchange is a new topic for QuickBooks users, hopefully Intuit gets a specific link up soon.
Let’s see how QuickBooks multi-currency accounting affects some typical transactions. Before we can enter transactions in a foreign currency for a customer or a vendor, we have to specify the currency in which all transactions for that customer or vendor will be recorded. If there are no transactions, we can edit an existing customer or vendor; otherwise, we’ll have to create a new record. We’ll start by creating a new customer and specifying that this customer will be accounted for using the €, or Euro. Next, we’ll produce a customer invoice but we’ll change the exchange rate to 1 Euro (€) = 1.5 US dollars.
At this point, because the customer invoice has not been paid, any foreign exchange-related gains or losses are unrealized. So let’s generate the Unrealized Gains & Losses Report by first entering the exchange rates for those currencies for which there are outstanding transactions.
Next, let’s record receipt of the customer’s payment in full. Both the invoice and the payment will be recorded in the same currency, the Euro (€). We’ll change the exchange rate to 1 Euro (€) = 1.25 US dollars to reflect a change in the exchange rate. Because this invoice has been paid, any foreign exchange related gains or losses have now been realized, so they’ll show up on the Realized Gains & Losses Report.
We’ll wrap up our review of this simple multicurrency transaction by looking at the impact on the company’s records. Press the Journal button (or alternately, Ctrl Y) while viewing either the customer invoice or payment to see the specific entries QuickBooks made. The Journal for our Invoice transaction shows the debits and credits for that transaction. Next, let’s go back in time to before we entered the customer payment to review the unrealized gain or loss that would be recorded by entering the home currency adjustment described above. That’s the adjustment at the end of an accounting period to reflect exchange rates on the financial statement date rather than the original transaction date.
Let’s start with the Profit & Loss by running the Profit and Loss Standard report from the Reports->Company & Financial menu and pressing the collapse button. Here we’ll see the default account Exchange Gain or Loss created by QuickBooks when we enabled multi-currency tracking in our company file.
Finally, let’s review the Balance Sheet. Note that in order to demonstrate another aspect of multi-currency, this balance sheet was prepared as if the customer payment had not been received. It’s also based on recording a home currency adjustment as depicted above, where we changed the exchange rate to 1 Euro (€) = 1.75 US dollars. We’ll see that our customer receivable has been adjusted up by $250 because of the change to the exchange rate between the date we billed the customer and the date we entered the balance sheet. The upward adjustment matches gain reported as an Exchange Gain or Loss. Since our Exchange Gain or Loss account was an Other Expense account, the gain is shown as a negative expense. Once multi-currency tracking is enabled, balance sheet subaccounts will be created automatically for every currency with transactions.
Multi-currency tracking is one of the most powerful new features of QuickBooks 2009. Now it’s time to generate more foreign business!