Applying rounding amounts when working with different currencies
When you handle payments and reconciliations in multiple currencies, rounding differences can occur. Business Central provides settings to manage these differences automatically. This article explains how to handle rounding differences in Bank Account Reconciliation and the Payment Reconciliation Journal when using Continia Banking.
Continia Banking can match ledger entries for all currencies, independent of the bank account’s currency. The standard matching routine in Business Central only matches entries in the same currency.
Important
The G/L account used for posting rounding amounts must allow direct posting.
The general settings in Business Central
Continia Banking follows the general currency application settings in Business Central. The main fields are:
| Setting | Location | Description |
|---|---|---|
| Appln. Rounding Precision | General Ledger Setup > Application FastTab | Sets the allowed rounding difference when applying entries in LCY to entries in a different currency. Differences within the tolerance are adjusted automatically; others are posted to the Rounding Precision G/L Account. |
| Appln. Between Currencies | Sales & Receivables Setup > Purchases & Payables Setup > General FastTab | Controls whether cross-currency applications are allowed. Options:
|
| Debit Curr. Appln. Rndg. Acc. | Customer/Vendor Posting Group Card | Specifies the general ledger account to post rounding differences to. |
To handle rounding differences in the Bank Acc Reconciliation
The bank account reconciliation process ensures that bank transactions match the corresponding customer and vendor ledger entries. When dealing with foreign currency (FCY) bank accounts, reconciliation is limited to entries in the same currency. However, local currency (LCY) bank accounts allow payments in multiple currencies, depending on system settings.
To handle rounding amounts within the tolerance settings
If the rounding amount falls within the tolerance specified in the Appln. Rounding Precision field, the system retrieves the relevant data in the Bank Acc. Reconciliation. When a payment application proposal is applied:
- If the difference is within the rounding tolerance, Continia Banking treats it as a rounding adjustment and posts it to the designated rounding G/L account.
- A rounding difference generates an additional journal line.
- Once posted, the process is complete.
To handle rounding amounts that exceed the tolerance settings
If the rounding amount exceeds the tolerance set in the Appln. Rounding Precision field, the line in the bank account reconciliation displays with status Difference, indicating an unresolved discrepancy.
To resolve differences:
Transfer the difference – select Transfer Difference to Account. This creates an additional line.
Post the difference – use Post All Journal Lines to process both the regular entries and the difference in one step. Alternatively, post lines individually in separate journals using the Post Journals option on the Payment Application Review page.
Review and adjust – modify the transaction or apply the difference manually to a specific ledger entry.
To handle rounding differences in the Payment Reconciliation Journal
The Payment Reconciliation Journal automates the matching of payments to open customer or vendor ledger entries. It ensures that the Amount to Apply is in the currency of the entry, which may differ from the bank account’s currency.
The system follows the Application Between Currencies field setting from Sales & Receivables Setup and Purchases & Payables Setup. The bank account currency is the default for application.
To handle rounding amounts within the tolerance settings
Rounding differences are generated during posting and displayed in the posting preview. If the difference falls within the rounding threshold, the system automatically applies the payment. The system posts rounding differences to the G/L account associated with the customer’s or vendor's posting group.
For example, a company with an LCY set to GBP processes a bank statement in GBP. A customer payment is matched to an invoice in USD, resulting in a rounding difference. The system automatically generates a rounding journal entry, which is visible on the Preview Posting page, ensuring the rounding amount is applied correctly.
To handle rounding amounts that exceed tolerance settings
If the rounding amount exceeds the tolerance:
Possible actions:
- Transfer the difference – in the Payment Reconciliation Journal, on the action bar, click Manual Application > Transfer Difference to Account. This creates an indented line below the original entry.
- Review and adjust – modify the transaction or apply the difference manually to a specific ledger entry.