Balancing a Journal in the Base Currency

The base currency values in a journal must balance before the journal can be posted.

In a single currency environment, the base currency value is the only value entered on a transaction. In a multi-currency environment, the base currency value is mandatory. It is entered manually or calculated from another transaction value and rate.

SunSystems Financials can set the amount of a transaction to one of the following balancing amounts:

  • The amount required to balance the journal as a whole.
  • The amount required to balance the transactions for the current transaction reference.
  • The amount required to balance the transactions posting to the current accounting period.

These balancing options can be selected in the following forms:

  • Journal Presets (JNP) to preset the balancing amount on a selected preset journal transaction, for example, the last journal line in the preset.
  • Ledger Entry (LEN) to allow you to automatically set the balancing amount for a transaction as you enter a journal manually.

In addition, Ledger Entry displays various balancing totals to enable you to quickly identify an imbalance.

The Base Currency Balancing Rules

The base currency journal balancing rule determines how a journal imbalance in the base currency will be corrected. This rule is set in the Base Currency Amount Balancing option in Business Unit Setup.

Two balancing options are available:

  • manual balancing - where you must manually adjust the journal transactions and values to balance the journal
  • automatic balancing - where the system adds another journal transaction and posts the amount of the imbalance automatically to either a debit or credit Base Currency Balancing account, depending on whether the difference is a debit or credit value.

If the Automatic Balancing option is chosen, the base currency balancing accounts are identified in the Business Unit Setup. Separate debit and credit balancing accounts can be specified.

With automatic balancing, you can also apply a tolerance check to this amount. If the amount of the journal imbalance is greater than the tolerance amount, it will not be posted automatically. This prevents very large postings being made under the guise of rounding errors. For example, if an incorrect exchange rate has been used to calculate a base currency value.

The balancing rule applies to journals entered manually using Ledger Entry and those imported from other systems using Ledger Import (LIM).

Note:  The Balance By option extends the balancing rule to force the transactions within a journal to balance by an additional field, for example to balance within transaction reference.