Project Accounting Series: How to Convert Indonesian Rupiah to US Dollars Using the Mid Exchange Rate

In project accounting, I work with two currencies:

• Indonesian Rupiah (IDR)
• United States Dollar (USD)

Since the project uses a local bank account with Bank Mandiri and many transactions occur in Indonesian Rupiah, I need to convert those transactions into US Dollars before recording them in QuickBooks Online.

Fortunately, the process is quite simple.

Understanding Exchange Rates

An exchange rate is the value of one currency compared to another currency.

When converting Rupiah into US Dollars, I use the mid exchange rate provided by Bank Mandiri on the transaction date.

The mid exchange rate is calculated as the average of:

• the buying rate (buy rate), and
• the selling rate (sell rate).

Formula

Mid Exchange Rate = (Buy Rate + Sell Rate) ÷ 2

Figure  1

Finding the Exchange Rate

To obtain the exchange rate, I usually check the Bank Mandiri buy and sell rates from an exchange rate website, such as:

http://kursdollar.net

As shown in Figure (1), the exchange rates on 9 January 2018 were:

• Buy Rate: Rp 13,270
• Sell Rate: Rp 13,470

To calculate the mid exchange rate:

(Rp 13,270 + Rp 13,470) ÷ 2

= Rp 13,370

Therefore, the mid exchange rate for that day is:

Rp 13,370 per USD

Example Calculation

Suppose there is a project expense of:

Rp 5,000,000

To convert it into US Dollars:

Rp 5,000,000 ÷ Rp 13,370

= USD 373.97

Therefore:

Rp 5,000,000 = USD 373.97

Recording the Amount

The converted amount of USD 373.97 is the value that I use when recording the transaction in:

• Google Sheets project reports
• QuickBooks Online expense records

Using a consistent exchange rate helps ensure that financial reports remain accurate and comparable across different reporting systems.

A Practical Reminder

When working with multiple currencies, it is important to use the exchange rate from the actual transaction date whenever possible.

This helps maintain consistency between:

• bank records,
• spreadsheets,
• project reports,
• and accounting software.

Even a small difference in exchange rates can affect financial reporting when many transactions are involved.

Final Thoughts

Currency conversion is a small but important part of project accounting.

By using the mid exchange rate consistently, we can ensure that financial information is recorded fairly and accurately across different systems.

Thank you for reading, and I hope this simple explanation is helpful for anyone working with project accounting and multi-currency transactions.