EUR account does not balance

Our client pays from GBP to supplier in Spain for invoices in EUR
1/03/19 Money going out from GBP account, 25,307.34.

We record this as transfer to dummy EUR account using exchange rate as per HSBC bank 1.13627904 and pay 10 invoices for the total of EUR 28,756.2.

In EUR bank statement we have Money In 28,756 and Money out 28,756, balance nil.

However on GBP balance sheet it shows Money In 25,307.34, money out 24,655.92. Balance sheet uses exchange rate 1.1663.

Balance sheet shows balance on EUR account 651.41. If I journal this to currency charges my bank statement is then off balance, even though balance sheet is fine.

How to deal with this?

Thanks in anticipation

Kind regards

This is normal for foreign currency accounts, the GBP balance will drift as the incoming and outgoing transactions are at different exchange rates. You can correct it using “record currency loss/gain” on the bank account settings:

This is a special type of journal that resets the GBP nominal balance to the current exchange rate without changing the foreign currency balance, with the matching figure going to currency charges.

That’s great, many thanks for your help!

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