Clearing currency balances

 

There are lots of reasons why currency transactions might leave an open balance. For example, the invoice is 100 USD but the customer pays 95 EUR. Is the paid amount correct? Or is it 99.8 USD? 

To clear customer or supplier currency balances, you need to have prepayment(s) in a currency other than the main one (“Configurations”). 

You can see prepayments or other transactions under “Sales”/”Purchases” -> “Customer reports”/”Supplier reports”. 

NB! When you haven’t done balance clearing, this row would be green and open. 

If you want to know how to add prepayments and get more info about it, see here. 

To clear customer or supplier currency balances, you first need to open a customer card in (“Contacts” -> choose the relevant contact).

The customer card will open and there you can see customer/supplier balances and prepayments that have been added earlier.  

Click “More” and choose from where you want to clear your balance: “Clear balance (customer)” or “Clear balance (vendor)”. 

Then this window will open:

 

  • Date: this is the date of the balance
  • Transaction date: this is the date when payments will be made
  • Only prepayments: if checked, then only prepayments are removed

Also, you can delete the previous year’s balances as of today’s date, etc. 

For example, you want to clear out the 31st December balances. But you want to do this as of today’s date. So, thanks to “Date” we can tell the system to take the 31st December, 2023 balance. Now clear it with today’s date as “Transaction Date”, so the transaction for clearing out is today. If something happened during this year, it doesn’t matter. It takes the balance with the value of 31st December.

When you click “Save”, the system will connect prepayments: 

  • It takes all open prepayments and returns them, using the currency exchange loss system account
  • If necessary (if the system account doesn’t exist already), the system will automatically add new accounts to make proper returns: 

The system accounts are located in “Settings” -> “Initial data” -> “System accounts”. To edit a system account, click on the relevant row twice and then you can change it as you need.

When clicking “Save” while you also want to remove unpaid invoices (“Only prepayments” is not checked ), it marks them as paid into a currency loss account. 

This transaction can be viewed under “Sales”/”Purchases” -> “Cash in”/”Cash out”. 

 

  • Currency: if the prepayment was in USD, then it will show $
  • Account: will change to 55101 – Currency exchange losses USD
  • Sum Paid: the prepayment sum that was cleared
  • Loss from currency: loss due to currency change
  • Type: “Other money out (report)”
  • Info: Clearing prepayments

After returning prepayments currency by currency, the system settles them and if necessary also adds currency loss transactions to the added prepayments.

What did the system do? It carried out prepayment and clearing transactions. The system used the 55101 – Currency exchange losses USD settlement.

As a result, the transactions are not open anymore. If the system didn’t connect them, both transactions would be open (marked green). If that supplier/customer has a balance of zero, and they would be both open, the minus line and plus line would cancel each other out. Then, in the supplier report, it would be shown as zero.