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Bank reconciliation with movements in a foreign currency

In Reviso, our accounting program for SMEs and freelancers, it is possible to carry out bank reconciliation. This is nothing more than comparing the movements of your bank statement with the records made in your accounting, which allows you to verify that you have not forgotten to record any transactions.

Furthermore, it is also possible to create accounting entries from your bank statements, further simplifying the task of accounting. Check out our help article to learn how to use bank reconciliation in Reviso.

Next, we are going to see how to create our accounting from a bank statement with movements in base and foreign currency.

Bank statement in base currency

Let’s imagine that we are reconciling an extract from one of our banks, and with which we work with the same currency as in Reviso, let’s say GBP.

To import the movements of the bank statement in Reviso it is possible to do it manually from an Excel file, once imported the bank statement entries will appear automatically in Reviso on the right hand side of the Bank Reconciliaton screen.

Now we are going to transfer those movements to accounting. For this, we simply have to select the entries and click on the Transfer option.

One of the movements is a collection from a customer, to whom we have issued an invoice in foreign currency, so we will have to link that payment to the invoice issued.

To do this we simply have to select the currency in which the invoice was issued in the field that we find at the top.

When selecting another currency, the system will ask us if we want to make a currency exchange and convert the amount that appears in the statement to the selected currency.

We will press “Yes” when the movements of our bank statement come in base currency , GBP in our case. In this way, Reviso will automatically convert to the selected foreign currency.

As seen in the image above, when you click “Yes”, Reviso converts to the selected foreign currency Euro. Thus, we can see under the debit and credit columns the amounts converted to the value in foreign currency and the amounts in the base currency GBP are kept in the rightmost column.

It is not possible to modify the amount of the bank line in the column in GBP, since this is the amount that appears in the bank statement and it is what has happened in reality.

It is then possible to select the customer and the invoice for which the collection is being recorded. If there are differences between the amounts due to exchange rate differences, Reviso will show them to you so you can record them. Bearing in mind that the exchange rate when the invoice was raised may well be different to the exchange rate when the payment was received.

NOTE : Keep in mind that when you open the list of invoices, only those invoices that have been registered in the selected foreign currency will appear.

Bank statement in foreign currency

In Reviso, it is also possible to import a bank statement which is in a foreign currency. For example, we work in GBP but you may well have a bank account in the Euros or USD.

We could import our bank statement as we have explained previously, through an Excel file, and transfer the movements by selecting them in the list on the right and clicking on the Transfer button .

Next, we must change the Currency to the foreign currency in which our bank statement is, in our case Euros.

The system will ask us if we want to make a currency exchange and convert the amount to the selected currency and, in this case, we will have to answer ” No “, since the amounts already come in the foreign currency and we do not need to make any additional conversion.

The program, as we saw previously, will show a new column on the right where we will see the amounts in the base currency GBP, and the Debit and Credit columns will show the amounts in the foreign currency EUR.

In this case, the amount of the bank line that appears in foreign currency is blocked, since this is the amount that appears on the bank statement and therefore should not be modified.

As can be seen in the image, when linking the customer’s invoice, an additional line has been automatically created where the exchange rate difference that has occurred is shown.

The account that appears in the line of the exchange rate difference is configured in the System Accounts. These accounts can be modified if you wish, although a first configuration is given by default.

Updated on October 5, 2020

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