My client has a Euro bank account with a balance of approx €95,000 at the year end but Sage Line 50 shows the £ equivalent to be an overdrawn balance of £57,000 on the Trial Balance. When I run the foreign bank revaluation wizard the £ balance changes and is a lot closer to the actual true £ equivalent figure but the effect on the Profit and Loss Account is quite large.
I am struggling to understand this in order to explain it to my client. I rang the Sage helpline and they said that the cumulative effect of exchange rate variances on all the € transactions in the year could easily have such a large effect BUT surely the revaluation wizard is only revaluing the bank balance at the year-end and not every individual transaction in the year?
The default exchange rate in Sage currency settings is not much different to the year-end rate I have entered and I really don't understand why Sage is showing a positive bank balance as negative in the first place and why the wizard is correcting it.
Thanks for any help
Alison
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Replies (8)
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Trace the transactions through in E and £
What else can we tell you?
Either Sage had some duff rates in it at some stage or a posting has gone astray
Have a particular look
for postings which have gone through at the inverse exchange rate (e.g. $1:£1.60). Quite a common error especially with the earlier versions of foreign trader.
Look at transactions with incorrect rates of exchange
I have recently had a client who posted a transfer from dollar to euro account at the incorrect rate. When she went to do the revaluation wizard it wanted to do a huge revaluation.
Also there is a glitch in Sage V17 if you transfer dollars to dollars or other same currencies it will only convert one side of the journal to sterling. To overcome this see below.
This is a known issue with Sage and is caused by a setting in Invoice and Order Defaults. Within the General Tab at the bottom of the screen is an option for Currency Exchange Rates. Yours is currently set to ‘Never save any exchange rate changes’. If you change this setting to ‘Always prompt to save exchange rate changes’ the problem will no longer occur .
Dollar to dollar transfers
A client of mine has experienced the issue with the dollar to dollar transfers with only one side of trade loan transactions being converted. This has occurred throughout the year, but the dollar balance at the year end is nil, but because only one side of the transaction being converted, it has left a credit balnce in the base currency (sterling). How can this be corrected as I assume that any adjustment will result in the dollar balance being affected even though that is correctly recorded at nil?
Just revalue
the dollar account.
Sage does not automatically revalue bank accounts. Select Modules - Wizards - Foreign Bank revaluation wizard. If the Dollar value is nil, this will take the sterling amount to nil.
Sage glitch
As Studutt has mentioned that there is a problem with some versions of Sage on converting one side of a journal and you need to look at the audit traill which will confirm if one side has not been converted. The revaluation wizard will sort these out and it eventually sort the r/e difference account. If this is the case to stop this happening in the future they need to change a setting by going to settings>invoice & Order Defaults>bottom of the general tab there is a box for currency settings. This should read "always prompt to save exchange rate changes". If it doesn't click in the down arrow and choose it. then say OK.
You cannot post journal transactions against non-Base Currency B
I need to make some Journal entries for the year end.
I get this error message from Sage : You cannot post journal transactions against non-Base currency Bank Accounts.
We have 3 bank accounts with a different currency. The foreign (EUR, USD, CHF) currency balances are correct, but there are big differences at the base balances (GBP).
Thank you for any help.
Klaudia