Multiple Currency Reconciliation

  • This type of reconciliation happens if a transaction involves multiple currencies in a single transaction.
  • Though a reconciliation of this type of transaction involves a process different from the regular Bank or Credit Card Reconciliation, ensures that all the outstanding multi-currencies unreconciled items in the bank transactions are completed for each month end.

Multiple Currency Transaction

A multiple currency transaction happens when an invoice/bill received is in a currency different from that of PIKOHANA‘s bank account.

Illustration:

Contractor’s Bill is in PHP

PIKOHANA‘s bank account is in SGD

Reference bank account is in HKD

Reconciling a multiple currency transaction

1. In the reconciliation process, you will not be able to find the invoice (which is in PHP) in Xero that will match the transaction from the bank statement (which is in SGD).

2. To reconcile the correct invoice, you need to use “Clearing Accounts.”

  • For our illustration, use the “PHP Clearing Account.”

3. For transactions such as the illustration, the reconciliation will be as a transfer to the specific “Clearing Account.”

4. The amount to be used in the Clearing Account Currency Conversion should be the amount on the bill, which is in PHP in our illustration.

5. Reconcile the transaction.

6. Once the account is reconciled, import the bank statement line items in the Clearing Account for these two transactions:

  • Amount transferred from the earlier account, specifically the HSBS SGD Savings Account.
  • Amount out for the payment of the bill.

7. Upload and reconcile accordingly.

8. Match the money in to the transfer recorded earlier.

9. Match the money out to the PHP bill.